The Impact of the Internet on Intellectual Property Law
III. (a) COPYRIGHT AND RELATED RIGHTS
40. This Chapter addresses the developments that have taken place in the field of copyright and related rights, as a result of the impact of digital technologies. It begins with an introduction to "digital copyright," then addresses the WIPO "Internet Treaties," and describes emerging developments in law and technologies that relate to the protection and exploitation of copyright works online. Finally, it describes developments in licensing and collective management of rights that enable creators and rightsholders to manage and exploit their rights in the digital environment.
(i) INTRODUCTION TO DIGITAL COPYRIGHT
41. The protection of copyright and related rights covers a wide array of human creativity. Much of the creative content that fuels electronic commerce is subject to such protection. Under the most important international copyright convention, the Berne Convention, [65] copyright protection covers all "literary and artistic works." This term encompasses diverse forms of creativity, such as writings, both fiction and non-fiction, including scientific and technical texts and computer programs; databases that are original due to the selection or arrangement of their contents; musical works; audiovisual works; works of fine art, including drawings and paintings; and photographs. Related rights protect the contributions of others who add value in the presentation of literary and artistic works to the public: performing artists, such as actors, dancers, singers and musicians; the producers of phonograms, including CDs; and broadcasting organizations.
42. Digital technology enables the transmission and use of all of these protected materials in digital form over interactive networks. The process of "digitization" allows the conversion of such materials into binary form, which can be transmitted across the Internet, and then re-distributed, copied and stored in perfect digital form. While the transmission of text, sound, images and computer programs over the Internet is already commonplace, this is also becoming true for transmission of audiovisual works such as feature films, as the technical constraints of narrow bandwidth begin to disappear. [66] Materials protected by copyright and related rights, spanning the range of information and entertainment products, constitutes much of the valuable subject matter of e-commerce. [67]
43. Given the capabilities and characteristics of digital network technologies, e-commerce has had a tremendous impact on the system of copyright and related rights, and the scope of copyright and related rights in turn is affecting how e-commerce evolves. It is essential that legal rules are set and applied appropriately, to ensure that digital technology does not undermine the basic tenets of copyright and related rights. From one perspective, the Internet has been described as "the world's biggest copy machine." [68] Whereas earlier technologies such as photocopying and taping allow mechanical copying by individual consumers, they do so in limited quantities, requiring considerable time, and resulting in copies of lesser quality. Moreover, the copies are physically located in the same place as the person making the copy. On the Internet, by contrast, one can make an unlimited number of copies, virtually instantaneously, without perceptible degradation in quality. [69] And these copies can be transmitted to locations around the world in a matter of minutes. The result could be the disruption of traditional markets for the sale of copies of programs, art, books and movies. [70] In the music industry, for example, the emergence of Internet-based file swapping services such as Napster and others, described below, have enabled a large-scale exploitation of music and recordings without the authorization of the rightsholders. That exploitation was further aggravated by the simultaneous broad commercialization of CD burners and portable MP3 players, adapted to the most commonly used file format.
44. These challenges face the copyright industry at a time when the share of copyright in national economies is reaching unprecedented levels. The economic value of the copyright industry in the United States alone is estimated at US$91.2 billion (motion pictures, music and television), according to International Intellectual Property Alliance (IIPA). [71] The share of copyright industries currently represents 5.24% of the U.S. gross domestic product, growing more than twice as fast as the rest of the economy, a growth largely attributed to America's strong copyright laws and effective enforcement mechanisms. Similarly, a study of the copyright industries in the MERCOSUR countries reveals that the share of copyright-protected activities in the value added of Uruguay was 6% in 1997, and of Brazil was 6.7% in 1998, accounting in the latter for 1.3 million jobs. [72] This significance gives weight to the copyright industries' search for technical and legislative solutions to protect copyright from digital piracy.
45. It is therefore critical to adjust the legal system to respond to the new technological developments in an effective and appropriate way, and to do so quickly and continuously, because technologies and markets evolve increasingly rapidly. This will ensure the continued furtherance of the fundamental guiding principles of copyright and related rights, which remain constant whatever may be the technology of the day: giving incentives to creators to produce and disseminate new creative materials; recognizing the importance of their contributions, by giving them reasonable control over the exploitation of those materials and allowing them to profit from them; providing appropriate balance for the public interest, particularly education, research and access to information; and thereby ultimately benefiting society, by promoting the development of culture, science, and the economy.
(ii) THE WIPO INTERNET TREATIES
46. Significant issues in the field of copyright have been examined for a number of years through various public and private processes, at WIPO and other international organizations, and at national and regional levels. Significant progress has been made, with international consensus having already emerged on some of these issues. In 1996, two treaties were adopted by consensus by more than 100 countries at WIPO: the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) (commonly referred to as the "Internet Treaties"). [73] The treaties, each having reached their 30 th ratification or accession, both have entered into force: the WCT on March 6, 2002, and the WPPT on May 20, 2002. [74]
47. The WIPO Internet Treaties are designed to update and supplement the existing international treaties on copyright and related rights, namely, the Berne Convention [75] and the Rome Convention. [76] They respond to the challenges posed by the digital technologies and, in particular, the dissemination of protected material over the global networks that make up the Internet. The contents of the Internet Treaties can be divided into three parts: (1) incorporation of certain provisions of the TRIPS Agreement [77] not previously included explicitly in WIPO treaties (e.g., protection of computer programs and original databases as literary works under copyright law); (2) updates not specific to digital technologies (e.g., the generalized right of communication to the public); and (3) provisions that specifically address the impact of digital technologies.
48. The following paragraphs address: (a) the scope of rights protected under the Internet Treaties, highlighting new developments in response to digital technologies; (b) issues relating to enforcement and management of rights; and c) the status of implementation of the Internet Treaties internationally.
(a) Scope of Rights
49. The definition of rights, which determines their scope, is a key issue, as intellectual property is neither more nor less than the sum of the rights granted by law. Under existing treaties and national legislation, the owners of copyright and related rights are granted a range of different rights to control or be remunerated for various types of uses of their property. For both groups of rightsholders, these rights include rights of reproduction and of certain acts of communication to the public, such as public performance and broadcasting. The development of digital technologies, that enable transmission of works over networks, has raised questions about how these rights apply in the new environment. In particular, when multiple copies are made as works traverse the networks, is the reproduction right implicated by each copy? Is there a communication to the public when a work is not broadcast, but simply made available to individual members of the public if and when they wish to see or hear it? Does a public performance take place when a work is viewed at different times by different individuals on the monitors of their personal computers or other digital devices?
50. Perhaps the most basic right granted under both copyright and related rights is the right of reproduction, which under the Berne Convention covers reproduction "in any manner or form." [78] This right is at the core of e-commerce, because any transmission of a work or an object of related rights presupposes the uploading of that work or object into the memory of a computer or other digital device. In addition, when the work or object is transmitted over networks, multiple copies are made in the memory of network computers at numerous points. It is therefore necessary to determine how the reproduction right applies to such copies.
51. In 1982, at a meeting of government experts co-organized by WIPO and UNESCO, a broad-based understanding was reached that uploading into a computer memory should be considered as an act of reproduction. This understanding was reconfirmed in 1996 in agreed statements to the WCT and WPPT, which state:
"The reproduction right... and the exceptions permitted thereunder, fully apply in the digital environment, in particular to the use of works in digital form. It is understood that the storage of a protected work in digital form in an electronic medium constitutes a reproduction within the meaning of the [relevant treaty right.]" [79]
The appropriate application of the reproduction right in the case of temporary copies in computers' random access memory (RAM) continues to be a subject of debate at the national and international levels. The key question is whether such copies always require the consent of the rightsholder in order to avoid infringement. Carefully tailored exceptions for such copies in certain circumstances have, for example, been enacted in the United States of America in the Digital Millennium Copyright Act ("DMCA"), [80] and adopted by the European Community in its Directive on the harmonization of certain aspects of copyright and related rights in the information society (the E.U. Copyright Directive), both of which are described below. [81]
52. The WCT (Article 8) and the WPPT (Article 14) also clarify the extent of rightsholders' control when works, performances and phonograms are made available to the public for downloading or access on the Internet. For example, Article 14 of the WPPT provides:
"Producers of phonograms shall enjoy the exclusive right of authorizing the making available to the public of their phonograms, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them."
This type of transmission differs from broadcasting, in that the material is not selected and delivered by an active transmitter like a broadcaster to a group of passive recipients. Rather, it is transmitted interactively, that is, on demand from individual users, at a time and place of their choosing. The treaties require that an exclusive right be granted to control such acts of "making available," while leaving it to individual countries to decide how to categorize this right under national law.
53. Issues related to moral rights are also given new importance in the digital environment, as the new technologies offer unprecedented means for users to manipulate or "morph" copyright works, creating rights in derivative works, and possibly infringing the original authors' moral rights of integrity. The WPPT (Article 5(1)) recognizes moral rights of attribution and integrity, as follows:
"Independently of a performer's economic rights, and even after the transfer of those rights, the performer shall, as regards his live aural performances or performances fixed in phonograms, have the right to claim to be identified as the performer of his performances, except where omission is dictated by the manner of the use of the performance, and to object to any distortion, mutilation or other modification of his performances that would be prejudicial to his reputation."
(b) Enforcement and Management of Rights
54. Issues of enforcement and management are not new, but take on added dimensions and urgency when works are exploited on digital networks. As noted above, the technologies pose substantial practical challenges. In order for legal protection to remain meaningful, rightsholders must be able to detect and stop the dissemination of unauthorized digital copies, accomplished at levels of speed, accuracy, volume and distance that in the past were unimaginable. And for e-commerce to develop to its full potential, workable systems of online licensing must evolve, in which consumers can have confidence. The answer to these challenges to a great extent will lie in the technology itself.
55. The WCT and the WPPT also break new ground in recognizing the emerging role to be played by technological protection measures, and by online management and licensing systems. They require Member States to provide two types of technological adjuncts to the protection of copyright and related rights, in order to ensure that the Internet can become a safe place to disseminate and license protected material.
56. The first technological adjunct is generally referred to as an "anti-circumvention" provision, and is addressed in the WCT (Article 11) and the WPPT (Article 18). For example, Article 11 of the WCT provides:
"Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law."
Such provisions relate to the need of rightsholders to rely on technological measures to protect their works against infringement on the Internet. No matter how ingenious the technology used to protect works against unauthorized use, equally ingenious ways may be developed to circumvent it. The resulting level of insecurity could prevent rightsholders from disseminating their valuable works on the Internet. Given the inability to achieve total security, a realistic goal is to make the technology sophisticated enough to deter the ordinary consumer from seeking to circumvent, while granting legal redress against those who represent a greater threat - hackers and those engaged in circumvention as a business. [82] Toward this end, the treaties require Member States to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures used by rightsholders to restrict unlawful and unauthorized acts. The treaty language is general enough to allow significant flexibility to national governments in determining the details of appropriate implementation. [83]
57. As a second technological adjunct, the treaties protect "rights management information," providing legal support to rights management systems, under the WCT (Article 12) and the WPPT (Article 19). For example, Article 12 of the WCT provides:
"(1) Contracting Parties shall provide adequate and effective legal remedies against any person knowingly performing any of the following acts knowing, or with respect to civil remedies having reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement of any right covered by this Treaty or the Berne Convention:
(i) to remove or alter any electronic rights management information without authority;
(ii) to distribute, import for distribution, broadcast or communicate to the public, without authority, works or copies of works knowing that electronic rights management information has been removed or altered without authority.
(2) As used in this Article, "rights management information" means information which identifies the work, the author of the work, the owner of any right in the work, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public."
Rights management systems operate on the basis of electronic data that is attached to the works and objects of related rights. [84] The data may identify the author or performer, the rightsholder, and the work or object itself, and may further describe the terms and conditions for its use. Under the treaties, Member States must provide adequate and effective legal remedies against the deliberate removal or alteration of such information, and against the dissemination of works, performances or phonograms from which such information has been removed or altered, where these acts are performed with at least reasonable grounds to know that they will induce, enable, facilitate or conceal infringement. This will enhance the ability of rightsholders to exploit their property on the Internet, and allow consumers to rely on the accuracy of the information they receive so they can feel secure transacting online.
58. National legislation, in conformity with the treaties, makes provision against the circumvention of technologies designed to protect copyright works. Both the E.U. Copyright Directive, and the United States Digital Millennium Copyright Act (DMCA), [85] require protection for digital rights management systems that protect copyright in digital form. The E.U. Copyright Directive (Article 6.2) requires Member States to provide legal protection against the "manufacture, import, distribution, sale, rental, advertisement for sale for rental, or possession for commercial purposes of devices, products or components of the provision of services" for the purposes of circumventing technological measures, including encryption, scrambling or other copy control mechanisms. The DMCA, Title I, creates civil and criminal liability for circumvention of copyright protection technologies and for the knowing provision of false copyright management information or intentional removal of the same, providing a technical adjunct to the rights established by copyright law. [86]
59. Faced with the threat of piracy heightened by the use of digital technologies, rightsholders are increasingly turning to technology to provide protection for their intellectual property. This approach is supported by the legal measures against circumvention of such technologies, in the WIPO Internet Treaties, as described above. Technological systems of protection include: anti-copy devices, access control, electronic envelopes, proprietary viewer software, encryption, [87] passwords, watermarking, [88] fingerprinting (user authentication), metering and monitoring of usage, and remuneration systems. Several industry and technology initiatives to set standards in various industries have emerged over the years, although none have yet established uniform standards for technological protection measures. [89]
60. The music industry, for example, has developed copyproof compact disc (CD) technology that prevents CDs being played on computer disc drives. Copyproofing employs various technologies either by including errors in the data encoded on the CD, which allows the disc to be played on a standard CD player, but not on a CD-ROM, or by masking audio files as data files so that the CD-ROM drive cannot recognize the music. [90] The fact remains that these methods can currently all be circumvented. In the United States Government, various efforts have been made to pass copy protection legislation that will prevent the sale of any consumer "digital media device" (broadly defined as any hardware or software that reproduces, displays or retrieves or accesses any copyright work) that does not meet Federal Government copy-protection standards. [91] At the same time, the Government is exploring initiatives to mandate the introduction of copy-protection devices for digital television broadcasts. [92]
61. In a case brought under the DMCA, Universal City Studios, Inc. v. Reimerdes, [93] the defendant was found liable for copyright infringement for posting DeCSS, a decrypter for the Content Scramble System (CSS) used to encode motion pictures on DVDs, so as to enable them to play on Linux. [94] The Court rejected the defendant's argument that an injunction would prevent fair use of the decrypted material. Another case, United States of America v. Elcom Ltd. a/k/a ElcomSoft Co. Ltd, and Dmitry Sklyarov, [95] concerned criminal liability under the DMCA for circumvention of copyright protections in electronic book software sold by Adobe Systems Inc., where the circumvention program was legal under Russian law, but banned by the DMCA anti-circumvention measures. This case has been viewed as a test of the constitutionality of the DMCA, and the breadth of protection it grants over non-digital material, at a perceived risk to preservation of individual rights of free use. [96]
(c) Status of the WIPO Internet Treaties
62. As mentioned above, the WCT entered into force on March 6, 2002 and the WPPT on May 20, 2002. As at October 2002, the WCT has 37 and the WPPT has 38 States party. Since their adoption in 1996, the treaties have been implemented in a number of important legislative instruments, including the E.U. Copyright Directive, and the United States Digital Millennium Copyright Act (DMCA), summarized below.
63. For most countries, particularly those already in compliance with existing treaties, the implementation of the Internet Treaties does not require major rewriting of the law on copyright and related rights, nor any fundamental change in policy or the structure of their legal systems. Typically, a country may need to clarify the scope of existing rights to add the right of "making available" on demand. Because the scope of related rights has traditionally been more limited, additional rights such as moral rights may need to be added to protect performers or record producers. Although not required by the treaties, a country may choose to make adjustments to the limitations and exceptions to rights it provides. Finally, each country must provide adequate and effective legal remedies against the circumvention of technical protection measures and the deliberate deletion or alteration of rights management information, although these provisions are drafted generally in the treaties so as to give national legislators flexibility in their implementation.
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Digital Millennium Copyright Act ("DMCA") The United States of America enacted legislation entitled the "WIPO Copyright and Performances and Phonograms Treaties Implementation Act of 1998" as Title I of the Digital Millennium Copyright Act ("DMCA"). [97] Title I of the DMCA contains, among other things, provisions to implement obligations concerning technological measures and rights management information. Title I of the DMCA also requires the United States Copyright Office to conduct two studies jointly with the National Telecommunications and Information Administration of the Department of Commerce, one dealing with encryption and the other with the effect of technological development on existing exceptions in the Copyright Act, as part of an ongoing evaluation on the relationship between technological changes and the copyright law. Accordingly, two reports have been submitted to the Congress. [98] Title II of the DMCA entitled the "Online Copyright Infringement Liability Limitation Act" deals with the issue of the liability of service providers based on a copyright-specific approach. |
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"E.U. Copyright Directive" The European Parliament and the Council of the European Union adopted a Directive 2001/29/EC on the harmonization of certain aspects of copyright and related rights in the information society in May 2001. Member States are obligated to implement the provisions of the Directive by December 22, 2002. The European Community and its Member States have already signed the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). This Directive serves, among other things, to implement a number of the new international obligations provided under the WCT and the WPPT. The European Community's instruments of ratification will be deposited with WIPO following the deadline for the Member States to transpose the Directive into their national legislation. The Directive contains a number of important provisions to implement the Treaties, including those concerning the application of the right of reproduction in the digital environment and temporary reproduction; the right of making available applicable to interactive transmissions on networks such as the Internet; limitations and exceptions in the digital environment; technological measures for protection; and rights management information. |
64. Further promotion of the WCT and the WPPT. Although the Internet Treaties have now entered into force, in order that they be truly effective in the digital environment, they must become widely adopted in countries around the world, and their provisions must be incorporated in national legislation. National implementation of the Internet Treaties assists in promoting the development of e-commerce, both domestically and internationally, and encourages direct foreign investment, by providing greater assurance to businesses that their property can be safely disseminated there. Therefore WIPO is devoting substantial resources to offering guidance to governments that are in the process of adhering to the Treaties and transforming them into national legislation. Such guidance includes the provision of legal advice, consultations with national governments and organization of national and regional meetings.
(iii) EMERGING COPYRIGHT ISSUES
65. Although the WCT and the WPPT now provide basic norms clarifying and safeguarding the protection of copyright and related rights in relation to the digital environment, and serve both as a guide and a model for national legislation, certain unresolved questions remain at the international level. [99] In addition, a number of important recent developments have occurred in the field of copyright and related rights that have far-reaching implications for the industry, and that are being addressed in legislatures, judiciaries and other international fora. While courts in some jurisdictions are responding to new types of infringement resulting from the use of digital technologies, new laws are also being debated and passed in some countries to ensure effective protection and enforcement of rights in the digital era. At the same time, copyright industries are also adapting their business methods and uses of technology to exploit the digital opportunities, while guarding against new risks.
66. Some of the most significant of these issues are detailed below, addressing the following:
- scope of copyright protection in the digital environment;
- responsibility of online service providers;
- rights of performers in the digital environment;
- rights of digital broadcasters - webcasting and digital film and television online;
- linking of copyright information online - deep-linking and framing;
- protection of databases; and
- peer-to-peer file sharing systems such as Napster.
Three of the most important of these issues are currently under discussion at WIPO with a view to the possible development of new international instruments, namely: audiovisual performers' rights, broadcasters' rights, and sui generis protection for databases that do not qualify for copyright protection. The first two are already protected by multilateral treaties, but require updating and improvement; the latter would establish a new form of international protection. Additional activities in other fields are also under consideration. [100]
(a) Scope of Copyright Protection in the Digital Environment
67. Exceptions and limitations to copyright. The copyright system has traditionally maintained a balance between protecting creators' property rights and the exclusive right to control use of copies of their work, and the public good in fair access to and use of such materials. Copyright laws permit exceptions to copyright, in order to maintain this balance. In the United States, for example, this balance has been enshrined in the principle of "fair use" [101] limitations on the rights of authors, while in other countries such as Australia and the United Kingdom, the concept is recognized by way of statutory exceptions to copyright infringement for "fair dealing." [102]
68. This balance is now in question because of digital technologies, and the way in which they have changed how we access and use information. [103] In the physical world, we can access copyright materials without infringing copyright, by borrowing a book from a library, for example. [104] Online, each access to such material involves an act of copying, where the simple act of viewing a website requires the computer to make temporary local copies of the data in our computers' random access memory (RAM). In addition, increasingly, copyright works are not sold, in the way that a book or videocassette was sold in the past, but are licensed under certain terms and conditions of use. Our access to copyright works is increasingly governed by contract, which may impact on the application of exceptions and limitations, the traditional checks and balances of the copyright system, aimed at preserving the rights of consumers and the public interest.
69. A number of questions are raised about exceptions and limitations to rights in the digital environment. Are existing exceptions and limitations, written in language conceived for other circumstances, too broad or too narrow? Some exceptions, if applied literally in the digital environment, could eliminate large sectors of existing markets. Others may implement valid public policy goals, but be written too restrictively to apply to network transmissions. New circumstances may also call for new exceptions. These questions must be examined in light of the international standard established for the permissibility of exceptions and limitations to certain rights, known as the "three-step test". Under this test, as set out in the Berne Convention and TRIPS Agreement, exceptions are permitted "in certain special cases" that "do not conflict with a normal exploitation" of the work and "do not unreasonably prejudice the [owner's] legitimate interests." [105]
70. As to the scope of these exclusive rights, the WIPO Internet Treaties continue to provide flexibility to individual countries to develop exceptions and limitations that are appropriate to their particular circumstances. The general "three-step" test applied to the reproduction right in the Berne Convention and to all rights in the TRIPS Agreement is extended to apply to all rights in the Berne Convention and in the WCT (Article 10) and the WPPT (Article 16). An important agreed statement in the WCT (concerning Article 10) and the WPPT (concerning Article 16) clarifies that this test permits countries to extend existing exceptions and limitations into the digital environment, or to add new ones, as appropriate. For example, the WCT provides:
"Agreed statement concerning Article 10: It is understood that the provisions of Article 10 permit Contracting Parties to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws which have been considered acceptable under the Berne Convention. Similarly, these provisions should be understood to permit Contracting Parties to devise new exceptions and limitations that are appropriate in the digital network environment.
It is also understood that Article 10(2) neither reduces nor extends the scope of applicability of the limitations and exceptions permitted by the Berne Convention."
71. As described above, the goal of policy makers is to achieve an appropriate balance in the law, providing strong and effective rights, but within reasonable limits and with fair exceptions. If this effort is successful, the result should be a positive impact from all perspectives. Trade in copyrighted works, performances, phonograms and other protected objects will become a major element of global e-commerce, which will grow and thrive along with the value of the material that is traded. If rightsholders are secure in their ability to sell and license their property over the Internet, they will exploit this market fully and make more valuable works available through this medium. Appropriate limitations and exceptions will continue to safeguard public interest uses. The result will be a benefit to consumers, a benefit to rightsholders, a benefit to service providers, and a benefit to national cultures and economies - a true "win-win" situation.
72. Preserving authors' rights online. Attention has been drawn to the scope of copyright law in an online context, in a practical sense, by two significant cases in the United States of America. They raise the question to what degree authors retain the right to control and license their works, when those works are re-compiled or re-distributed electronically in the digital environment. In the case of The New York Times, Co. v. Tasini, the United States Supreme Court affirmed a decision in favor of the American National Writers Union against various news distributors, which had been selling freelance writers' material to electronic databases, including Lexis/Nexis, without any additional payment or negotiation of electronic rights with the authors. The Court found that the electronic re-publication of the writers' works constituted copyright infringement, and that the writers were entitled to receive royalties for the secondary use. [106] This reasoning was also upheld in National Geographic v. Greenberg, where the United States Supreme Court declined to hear an appeal from an earlier Appeals Court decision that the reproduction of freelance photographers' work in a searchable CD-ROM collection of past magazine editions involved a new use, for which the original authors were entitled to receive royalties. [107] Through such cases it is becoming clear, at least in some jurisdictions, that the legal characterization of uses of copyright works in an electronic context is being addressed so as to preserve and reaffirm the rights of creators in the digital environment.
73. Open source software movement. The "open source" movement in the software industry has adopted a different stance towards asserting intellectual property rights in software, which are traditionally proprietary and protected by copyright law, and in some jurisdictions patent law.[108] Open source refers to the development of software which is publicly available in source code form, in conformity with the certification standard issued by the Open Source Initiative (OSI). [109] The software, although usually copyright protected, is distributed free of licensing restrictions and thus encourages users to run, modify, copy and distribute the software freely, so long as certain conditions are met, including that the program's source code remains publicly available and the holder of the source code license does not collect royalties. The movement is designed to encourage collaborative software development, to remove programming errors or bugs and promote derivative works.
(b) Liability of Internet Service Providers
74. One issue of some concern in the intellectual property and Internet communities is the question of who should be liable for copyright infringement that takes place online. This issue is raised by the very nature of digital networks. When a work is transmitted from one point to another, or made available for the public to access, numerous parties are involved in the transmission. These include entities that provide Internet access or online services ("ISPs" or "OSPs"). When such service providers participate in transmitting or making available materials provided by another which infringe copyright or related rights, are they liable for the infringement? Such liability could arise in one of two ways: if the service provider itself is found to have engaged in unauthorized acts of reproduction or communication to the public, or if it is held responsible for contributing to or making possible the act of infringement by another.
75. Such issues have arisen under Chinese copyright law, for example, in the case of Wang Meng. v. Century Interconnecting Telecom Co. Ltd, which involved a service provider on whose website was posted works of six well-known Chinese novelists without their permission. [110] The defendant argued that China's Copyright Law does not address the Internet, and therefore that digital works could not infringe copyright. The Court found for the plaintiffs, holding that no derivative work was created simply by the process of digitization and that Chinese copyright law gave the author the exclusive right to exploit and profit from the work both online and off. The ISP was found to be in a position to control the distribution of the works, and was therefore liable for infringement.
76. The liability issue has significant international implications. Because the Internet is a borderless medium and its markets are global, it is critical that compatible approaches to this issue be adopted around the world. It is not necessary that the approaches be identical: they may differ depending on the particular circumstances and legal traditions in any given country. But they must be interoperable if global networks and electronic commerce are to develop smoothly. This issue was the subject of a WIPO workshop in 1999, that examined national and regional legal frameworks, notice and takedown systems, and the possibilities for international harmonization. [111] WIPO continues to monitor developments regarding this issue, including legal decisions, marketplace events and emerging legislation.
77. During the Diplomatic Conference on the WIPO Internet Treaties in 1996, the issue was intensively debated. The ultimate result was that the treaties are essentially neutral on the subject, with the issue of liability left to national legislation to determine. There is, however, one reference to the issue, in an agreed statement to the WCT, which provides that: "[i]t is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Convention." [112] The statement clarifies that the mere provision of wires used to communicate, for example, does not constitute an act of communication. But the statement is limited in its application; it does not cover a number of activities that service providers may engage in, and it does not deal with concepts of liability for contributing to the infringement of another.
78. Since 1996, a number of legislative solutions to this issue have begun to emerge. [113] These statutes differ as to whether they address copyright only, or take a "horizontal approach" that is, a rule governing liability of service providers regardless of the grounds for illegality of the transmitted material. In other words, the horizontal approach covers not only copyright infringement but also other laws such as libel or obscenity. [114] There are laws now in force in Germany and Sweden, which approach the issue from a horizontal perspective. Japan also has introduced the "Provider Liability Law", [115] which states that a provider is liable only if it is technically possible to prevent transmission of the infringing material; and the provider knows of the existence of the material and; (i) knows that it is infringing or (ii) reasonably ought to know that it infringes (Art. 3 (1)). A person whose rights have been infringed can ask a provider to disclose information about the person transmitting the material if the information is necessary for a legal claim or other legitimate reason (Art. 4(1)).
79. The European Community has adopted a Directive on Electronic Commerce with provisions that will harmonize the treatment of liability among its Member States, again using a horizontal approach. [116] Some commentators have argued that there are inconsistencies between the E.U. Copyright Directive and the E.U. E-Commerce Directive on the issue of online service provider liability. [117]
80. The alternative approach of implementing copyright-specific laws to determine online service provider liability, has been adopted by other countries, including Hungary, Ireland, Singapore and the United States of America. In the United States of America, Congress enacted copyright-specific legislation as part of the 1998 Digital Millennium Copyright Act (DMCA), after legislation in past years establishing different standards in other areas of the law. As part of the DMCA, the "Online Copyright Infringement Liability Limitation Act", establishes "safe harbors" to shelter ISPs from liability for copyright infringement in certain circumstances. [118] The DMCA sets down guidelines with respect to copyright infringement online, although it does not define when a provider is liable for copyright infringement and, in this respect, the existing principles of U.S. copyright law apply. Instead, the DMCA defines those categories of provider activity where providers are exempt from liability for damages [119] provided that: the provider is merely acting as a "passive conduit" for the information, is not the producer of the information, and has responded expeditiously to remove or disable access to infringing material upon notice from the copyright holder (the so-called "notice and takedown" provisions). To qualify for immunity, the provider must also implement a policy that terminates the subscriptions of repeat infringers, and accommodate and not interfere with technical measures put in place to protect and identify copyright works.
81. In one U.S. case testing these "safe harbor" provisions, ALS Scan, Inc. v. Remarq Communities, Inc., the issue was whether a service provider was liable for providing access to "adult" news groups that contained unauthorized copies of the plaintiff's photographs, after having been informed that the site was infringing. [120] In this case, the provider argued that it would only remove the materials when the infringing items were identified and listed with sufficient specificity, a difficult task given the number of photographs on the site. The Court found that the plaintiff had met its notice requirement and that, once notified, the provider could not rely upon the immunity granted by the DMCA. Action was also initiated in the United States of America under the DMCA, when 13 record companies requested the Court to order four ISPs to block access to a China-based website, Listen4ever.com, that was alleged to violate U.S. copyright laws. [121] The English-language site offered thousands of copyrighted songs for free download, before going offline upon initiation of the legal action.
(c) Rights of Performers in a Digital Environment
82. While the WPPT does protect the rights of performers, its provisions relate to the aural aspects of performances, and not to audiovisual performances. This is because diverse systems have evolved to protect audiovisual performers in different parts of the world, some based on legal rights and others on contract, and a compromise between the systems is difficult to achieve. While such performances are protected by many national laws, and also by the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, no multilateral treaty covers the rights of performers in authorized audiovisual fixations of their performances. The possible extension of international protection for performers to cover audiovisual performances might be perceived as a general question, not specific to e-commerce. It is, however, highly relevant because audiovisual performances will be used in an increasing measure on the Internet, through film and music videos for example, as available bandwidth increases. [122] Moreover, digital technologies permit the unauthorized manipulation and distortion of performers' images and voices (e.g., morphing). A satisfactory solution of this issue is therefore an important component of an overall clarification of the rights involved in e-commerce.
83. In December 2000, WIPO organized a Diplomatic Conference on the Protection of Rights in Audiovisual Performances. [123] While the scope of this Conference included a number of basic questions regarding that protection, it was also an important attempt to establish appropriate rights in connection with the convergence of the digital and audiovisual worlds. The Conference resulted in a general understanding between the participating government delegations concerning most substantive provisions of a WIPO audiovisual performances treaty, except for the international recognition of transfer of rights under national law.
84. The deadlock was related to the consequences that the international recognition of statutory transfers of exclusive rights could entail. Those countries in favor of such recognition demand to have certainty and clarity on the producer's ability to exercise the exclusive rights of authorization for the effective exploitation of films in a global environment. Opposition to that recognition is founded mainly in the concern that this could imply the application of domestic rules on the legal regulation of transfer or entitlement or rights in respect of the exploitation of films all over the world.
85. The Diplomatic Conference recommended to the WIPO Assembly of Member States, at its meeting in September 2001, to reconvene the Conference with the aim of finally adopting the new treaty. However, during the Assembly, Member States considered that it was necessary to continue consultations to resolve outstanding issues over the above-mentioned provision. They therefore decided to carry the issue over to the 2002 session of the WIPO Assemblies. [124] In the absence of such contacts, at the 2002 meetings the General Assembly approved the Director General's proposal that the International Bureau should conduct informal consultations with interested parties to explore the possibilities of convening an "informal ad hoc meeting" in the first half of 2003 "for the purpose of having informal exchanges on the remaining differences and possible ways of resolving them." Meanwhile, WIPO is maintaining a close dialogue with governments and non-government organizations to bridge the existing gaps and to find possible ways forward in the negotiations. [125]
(d) Rights of Digital Broadcasters
86. Webcasting and digital film and television. The Internet offers manifold opportunities for copyright content providers and distributors to supply their material to a global audience, including via; (i) webcasting and (ii) digital film and television online.
(i) Webcasting
87. Webcasting, also known as "streaming", is the process of digitally transmitting musical recordings, and radio and television broadcasts over the Internet. [126] The process is designed not to create permanent copies on end-listeners' computer hard drives, although software is available that allows users to convert streamed audio files into other formats which can then be transferred via peer-to-peer (P2P) systems, described below. [127] Some legislatures have responded to this new method of distribution of copyright works.
88. The United States Digital Millennium Copyright Act (DMCA), for example, provides a statutory license for webcasters whose services are not provided on-demand, and gives copyright holders the exclusive right to authorize webcasts that are provided on-demand. [128] "On-demand" transmissions are interactive broadcasts where the user chooses which songs to listen to from the website. Apart from broadcasting transmissions, the DMCA addresses four categories of webcasting: (1) sites providing original programming; (2) sites broadcasting secondary transmissions for analog radio; (3) aggregator sites facilitating access to commercial radio stations; and (4) entertainment sites that provide both audio and entertainment news.
89. The practice of retransmission of terrestrial radio stations' over-the-air broadcasts via the Internet has also raised copyright concerns. In National Football League et al v. iCraveTV.com, a case brought by United States and Canadian motion picture and broadcasting companies, the Court issued a permanent injunction to prevent iCraveTV.com, a Canadian website, from converting copyrighted television material from 17 North American television stations into digital Web broadcasts and streaming them over the Internet. [129] The unauthorized re-transmission was found to be an infringement of the plaintiffs' exclusive right to perform and display their works in the United States. Although iCraveTV's transmissions may have been legal under Canadian copyright law, they were not in accordance with United States law, and it was then impossible to prevent United States users from gaining Internet access to the service. iCraveTV has since relaunched its online service, broadcasting network and cable television programs, this time using copyright protection systems to prevent users in the United States from gaining access. [130]
(ii) Digital film and television
90. In the audiovisual industries, the Internet offers an unprecedented channel for global distribution of film and television works. However, until recently, major audiovisual companies have hesitated to engage wholeheartedly in the digital environment. The slow increase in bandwidth, which has restricted the speed at which large files can be transferred, had recently protected the industry from rampant piracy. However movie studios' fears have now been raised by the availability, before their official release, of pirated versions of most mainstream movies. For example, "Star Wars Episode II: Attack of the Clones" was available online over the file-swapping service, Internet Relay Chat, a week before its official premiere. Research has shown that between 400,000 and 600,000 films a day are being downloaded over such file sharing networks and pirate video-on-demand sites. [131] Changes in film release-business structures, such as "day-and-date" releases, that open films simultaneously in various regions, help to stem piracy but do not solve the problem. A further concern is with the so-called "analog hole", referring to the gap in protection created when digital signals are transformed into analog upon entry into a television set, at which point any copy protection mechanisms that have been incorporated in the digital file are removed. The unprotected analog film can then be uploaded to the Internet and pirated without restriction. Another development closely watched by the film industry has been the proliferation of "fan films", digital films that feature the characters and mise en scène of a film, a popular example being Star Wars, without the authorization of the copyright holder. [132] In one case, an animator distributed a Superman fan film online, prompting the rightsholders, DC Comics, to send a cease-and-desist letter. [133]
91. New developments are also taking place in the field of digital interactive television (iTV),
involving the use of:
- personal or digital video recorders (such as TiVo, ReplayTV and UltimateTV) that allow
viewers to digitally record shows by genre or actor, and pause and rewind live TV;
- video-on-demand (VOD), allowing viewers to choose which program to watch either by
pay-per-view or by subscription; and
- two-way programming, that enables viewers to interact with other viewers.
[134]
These developments have, however, been delayed by the current lack of copy protection that would secure the rightsholders' property in digital broadcasts. One such technology, put forward by the motion-picture and consumer electronics industry-based Broadcast Protection Discussion Group, and approved by the Federal Communications Commission, is the "broadcast flag", a marker embedded in digital-TV broadcasts that controls how consumer electronic devices can play and record the broadcasts, and designates those which cannot be copied. [135] Another initiative, the Hollywood-based Copy Protection Technical Working Group has been established to develop protection for digital television and video distribution. [136]
92. Broadcasting organizations have traditionally enjoyed protection in many countries for their broadcasts under either copyright or related rights, and their rights are protected under both the TRIPS Agreement and the Rome Convention. However, in this field, as with performers' rights, an updating of existing international norms is needed. Existing treaties may not adequately ensure that broadcasters (and providers of valuable programming not necessarily covered by copyright and related rights, such as certain sports transmissions) are able to safeguard and exploit their efforts and investments over the Internet. A new treaty could protect against digital piracy and manipulation of broadcast signals, furthering the use of the Internet as a medium for broadcasting activities, as described above.
93. Discussions are ongoing at WIPO concerning the potential for a treaty dealing with the rights of broadcasting organizations, and treaty language proposals have been received by WIPO from the European Community and a number of Member States. [137] The WIPO Secretariat prepared a technical background paper on the protection of broadcasts aimed to illuminate the issues involved during further consideration of this matter by the Standing Committee on Copyright and Related Rights. [138]
(e) Linking of Copyright Information Online
94. Liability for linking and deep-linking online content. The software that underlies the operation of the Internet allows information to be "hyperlinked" or "hypertext reference linked" within and between sites. [139] Such linking typically occurs when the creator of one website provides a reference to another website, usually indicated in colored text or icons, using software that allows the user to click on the reference and view the content on the linked website. While enabling users to surf fluidly from one website to another, this practice also raises copyright issues. A simple link from one website to the home page of another website does not normally raise concern, as the use of such links may be equated to the use of footnotes to refer to other sites. [140] Employing a simple link, the user merely views the material from the linked site, and is aware that it originates from a different website. This process does not create a copy of the linked work, other than that created in the random access memory (RAM) of the computer. Often, no permission is required to make a link to a site, either because the website owner has given an implied license to link by posting his material on the Web, or by characterizing such linking as fair use. [141]
95. However, other linking practices are more problematic. "Deep-linking" connects a user directly to secondary material on another site, bypassing that site's home or front page, and may amount to an infringement of copyright in the secondary material. Similarly, an "embedded link" creates a reference to content from another website such that the secondary material appears to be content originating from the first site. Such links, also called "in-line" links, do not require a copy to be made of the linked material, but may violate the author's right to display or communicate their work to the public. [142]
96. The use of deep-links to retrieve pages from the targeted site's database may, in some jurisdictions, amount to an infringement of rights in the database that contains the secondary information. In Europe, the E.U. Database Directive requires Member States to protect database owners from "repeated and systematic extraction and/or reutilization of insubstantial parts of the contents of the database implying acts which conflict with a normal exploitation of that database."[143] This Directive has been invoked to prevent a news aggregator's website from deep-linking to articles on commercial newspapers' sites. In a case under Danish copyright law, the Denmark Bailiff's Court issued an injunction to prevent Newsbooster.com from providing services that enabled users, for a fee, to use key words to prompt Web "bots" (automated computer programs) to search news sites. [144] The defendants were prohibited from offering deep-linking search services, from reproducing and publishing headlines from the sites and from distributing e-newsletters with deep links. In Germany, Munich's Upper Court has found similarly in a case brought by the German newspaper Mainpost against the search engine, Newsclub, which was found to have violated the copyright protection in Mainpost's news database by searching and linking directly to it. [145] However, a decision of the District Court of Groningen, Netherlands (under appeal), held that a newspaper's job listing section does not constitute a database under Dutch law, and cannot therefore be protected from being excerpted on a job search website. [146]
97. In the United States, where no sui generis database law currently exists, copyright owners have found protection against deep-linking by relying upon laws related to copyright, trespass, breach of contract, and common law misappropriation. [147] In the case of EBay Inc. v. Bidder's Edge Inc., it was found that use of Web bots to extract data about auctions from an auction site amounted to trespass. [148] In the case of Ticketmaster Corp. v Tickets.com Inc., Microsoft's Seattle Sidewalk online service published a deep link into Ticketmaster's website from which users could purchase tickets, bypassing Ticketmaster's home page, and therefore its revenue-producing advertising and corporate information. In that case, however, the District Court found that the deep links were neither deceptive nor unfair competition, nor did they constitute a violation of copyright, because the Web address, or uniform resource locator (URL), itself is not protected material. [149]
98. The issue of deep-linking was also addressed in a U.S. case, Kelly v. Arriba Soft Corporation, involving a "visual search engine" that searched the Web to reproduce many miniature "thumbnail" images with in-line links to the original photographs, that appeared in full size in a window on the defendant's site when users clicked on the miniature image. [150] One photographer, whose work was included among the images without authorization, sued the search company for copyright infringement. Although the Court of Appeals found in the circumstances that the compilation of the miniature images was fair use, [151] it also found that the use of embedded links to frame the full scale photograph did infringe the photographer's copyright, violating his right to display the works publicly and diverting users from his site. In another case brought under the DMCA, Universal City Studios, Inc. v. Reimerdes, the Court granted a permanent injunction to prevent the defendant from linking to sites that downloaded the DeCSS copyright circumvention program, finding that this practice was equivalent to trafficking in circumvention devices in contravention of the DMCA. [152]
99. Liability for framing online content. A related issue has arisen as a result of the practice of using browser software to "frame" content from another online source. The legal difficulty arises because the user sees the original website content, which may be copyright protected, framed by a different website, with a different URL, and possibly with different logos and advertising. This practice may constitute copyright infringement in some jurisdictions, because a copy of the material is made in the user's computer memory. In Germany, for example, framing is considered an infringement of the transformation right provided by Articles 62.1 and 39 of the German Copyright Act. In the case of Roche Lexicon, a Hamburg court decided that the RAM copies created in the process of framing constituted a reproduction of the work, that must be authorized by the rightsholder. [153] It is clear that the law will continue to respond, through legislative and judicial developments, to questions raised by new practices of connecting information and users to material online. Because of the borderless operation of the Internet, it is preferable that these responses are compatible, and enable users and website owners to exploit the Web of online information with confidence.
(f) Protection of Databases
100. As described above, [154] the economic value and importance of databases, as repositories for digital information, have vastly increased in the digital environment. There have been calls for an extension of the scope of existing international protection for databases. Databases that are original by virtue of the selection and arrangement of their contents are already protected under copyright. But copyright does not protect databases that are not original, such as a database that contains the entire universe of relevant facts and is therefore not selective, and is arranged in a non-creative numerical or alphabetical way.
101. In addition, even those databases that do qualify for copyright protection may receive a very narrow scope of protection, allowing competitors to take and market substantial portions of the information they contain. Such databases often represent significant effort and investment for their makers, and these investments are jeopardized by the ease and inexpensiveness of copying them with today's technologies. In response to this problem, the European Community has adopted the "E.U. Database Directive" requiring its Member States to provide a separate sui generis form of protection for databases. [155] On the other hand, concerns have been raised that, if not carefully balanced, a new form of protection might result in a monopoly position of information providers or otherwise be detrimental to the scientific, research and education sectors. [156]
102. The issue of protection of databases is being considered within WIPO as one aspect of the WIPO Digital Agenda, concerning the principle of protection of non-original databases, as well as the form which such protection might take. Many governments have indicated that further analysis is required of this issue. Five studies were commissioned by WIPO on the economic impact of non-original database protection in developing countries and countries in transition, and are now available. [157] These studies were distributed in conjunction with the meeting of the Standing Committee in May 2002, and a further study has been commissioned, while the issue remains on the agenda of the Standing Committee on Copyright and Related Rights (SCCR). [158]
(g) Peer-to-Peer File Sharing - Napster
103. The music industry has been at the vanguard of the intellectual property system in confronting the issues raised in the copyright field as a result of emerging digital technologies. This is largely because music is ideally suited to distribution over the Internet. Revenues from digital music are forecast to reach US$2.1 billion by 2007, representing 17% of the music trade. [159] The development of compression software, such as MP3 (mpeg3), [160] has enabled music files to be digitized and uploaded and downloaded freely from Web or file transfer protocol (FTP) sites. In a case relating to MP3.Com, an online music service, UMG Recordings, Inc. v. MP3.Com, Inc., the Court found MP3.Com liable for copyright infringement for facilitating the piracy of digital music, by making available its database of more than 80,000 musical recordings, almost all unauthorized. [161]
104. Music piracy has, however, reached unprecedented levels because of the emergence of "peer-to-peer" (P2P) file sharing systems, that facilitate the swapping of music and video files between users. [162] The original file sharing system was Napster, described below, although numerous P2P services have since emerged, including Aimster, [163] KaZaA and Grokster (using the FastTrack network), and Morpheus (using the Gnutella network). It is now estimated that 99% of all files transferred through such P2P systems are unauthorized. [164] This is significant, in light of estimates that 5.16 billion unlicensed audio files were shared across P2P networks in 2001, a volume predicted to increase to 7.44 billion files in 2005. [165]
105. The most notorious file sharing service is Napster, which uses a centralized server acting as a search engine to assist users to download music from the computers of other Napster subscribers. At its height, in February 2000, Napster was logging 1.57 million simultaneous subscribers. The downloading of music by Napster users was found, in the case of A&M Records, Inc. v. Napster, Inc. to be a direct infringement of copyright held by the recording companies. The Court determined that, even though Napster was not charging for its service and users were downloading the music for their personal use, the downloading was not a "fair use" under the United States Copyright Act (§107). [166] It was found that "repeated and exploitative copying of copyrighted works, even if the copies are not offered for sale, may constitute commercial use." [167] The copies were found to have been made to save the cost of purchase. This practice is cited particularly by the recording industries as a factor in the 15% drop in music sales experienced in the past two years. [168] In addition to finding Napster users liable for direct infringement, the Court found that Napster itself had engaged in contributory infringement, with actual and constructive knowledge of the infringing activities, and vicarious copyright infringement, because it had a direct financial interest in drawing users to its service as customers. By June 2001, the number of Napster users had fallen to 120,000.
106. However, while legal action has largely restrained Napster from making copyright music available online without authorization, it has proven more difficult to regulate other P2P systems with different network architecture that does not require a centralized server to process search requests and downloads, such that each user's computer acts as a search engine. These systems, including Gnutella, Audiogalaxy, KaZaA, MusicCity, Morpheus and Grokster, are now said to attract some 11.3 million users in Western Europe alone. [169] Nonetheless, such P2P systems have been targeted in anti-piracy campaigns, including legal action initiated by the Recording Industry Association of America (RIAA) and the Australian National Music Publishers Association against Audiogalaxy, which resulted in the P2P system removing most of its music files for download. [170]
107. In Japan, in a suit brought by 19 Japanese record companies, the Tokyo District Court issued a temporary injunction against Japan MMO, to prevent it from operating a P2P service called File Rogue. [171] In the Republic of Korea, in a suit brought by the Recording Industry Association of Korea, the Sungnam District Court closed down Soribada, the Republic of Korea's most popular P2P network. [172] Similar legal action has been initiated in the United States of America by the Motion Picture Association of America against the operators of other P2P networks, including KaZaA, MusicCity and Grokster, for infringement of copyright in motion picture and sound recordings. [173] It is notable, however, that in the Netherlands, the Amsterdam Court of Justice found in favor of KaZaA against Buma Stemra, a Dutch music rights organization. The Court held that KaZaA was not liable for individuals' abuse of its file sharing software. [174]
108. An alternative approach taken by the copyright industries is to target individual file-traders, through educational institutions or corporations where much of the piracy occurs, although this approach is limited because of sheer volume of users and privacy concerns. In one such action, an American corporation, Integrated Information Systems, reached a US$1 million settlement with the RIAA following evidence of illegal downloading and sharing of copyrighted MP3 files over its corporate network. [175] In another action, RIAA has taken action to compel an online service provider to reveal the name of a customer accused of large-scale illegal file swapping. [176] As mentioned above, some United States record companies have also sought to bring legal action directly against the Internet service providers, in an attempt to block access to offshore music sites, rather than attempting to initiate legal action in foreign jurisdictions against the site owners themselves. [177]
109. Controversy has also arisen as a result of efforts by the copyright industries to protect their rights against piracy by using digital technologies to monitor users of copyright material for potential violations. The film industry has employed search engines designed to scour the Web for copyright movies on P2P networks, and then to send cease-and-desist letters to users via their Internet service providers (ISPs). The providers, in turn, are locating potential infringers by monitoring high bandwidth users who are most likely to be exchanging copyright audiovisual material, because significant bandwidth is required to swap large movie files. [178] An alternative technique employed by the copyright industries is to distribute "spoof" files of music or film works onto the P2P networks, that contain only limited or degraded portions of the work, and are designed to discourage piracy by making the illegitimate file services less attractive to use. [179]
110. Draft legislation was introduced into the United States legislature by a Democrat Congressman, Howard Berman, designed to immunize copyright owners from liability for any offences they may commit while "disabling, interfering with, blocking, diverting, or otherwise impairing" the unauthorized use of their works on publicly accessible peer-to-peer file-sharing networks. [180] The legislation would provide copyright owners with a safe harbor from liability under American law for using tools including decoys or file blocking to prevent piracy of their copyright works on P2P networks, such as Napster. However, the proposal has provoked criticism from domestic and international sources. One issue is raised by the fact that immunity would only extend to American law, but could expose industry executives to liability in other jurisdictions for unauthorized access to computer systems, or violation of national privacy laws. [181]
(iv) LICENSING AND RIGHTS MANAGEMENT IN THE DIGITAL ARENA
(a) Licensing and Collective Management of Rights
111. As a reward for their creativity and investment, the copyright system grants creators exclusive rights in their works. Third parties are prohibited from using works in a manner that is covered by the exclusive rights, without obtaining permissions from the rightsowners. Rightsowners will usually grant such permissions in exchange for compensation (a "royalty") and on the basis of certain terms and conditions of use. These conditions are typically recorded in contractual arrangements concluded between rightsowners (or their representatives) and users ("licenses"). The exclusive rights conferred by the copyright system thus facilitate the commercial exploitation of creators' works.
112. Users of works can be either consumers (for example, a person purchasing a license for a computer operating system to be installed on his home computer) or intermediaries (for example, a book publisher who licenses the right to incorporate certain photographs in an encyclopedia). Often, intermediaries are also creators, but at a different stage of the production process, using the works of others as building blocks to which they add value for their own productions. The end product reaches the consumer either by ways of a sale (the usual practice in the case of books, for example), implying a transfer of ownership in the physical object rather than in the rights themselves, or through a license (the usual practice in the case of software, for example), often depending on industry practices. In the case of a transfer of ownership, the rights and obligations of the parties with respect to the intellectual property incorporated in the physical object tend to be governed by law, whereas, in the case of licenses, they are mostly regulated by contract.
113. Licensing implies at least a minimum level of bargaining between the rightsowner and the person who wishes to use the work in a manner covered by the exclusive rights. Even assuming that the terms of use and the royalty are totally standardized, at the very least there is a need to conclude an agreement between the user and the rightsowner or its representative. In certain sectors, such licenses are concluded on a one-to-one basis directly between the rightsowners and the users. This is the usual practice in, for instance, the software industry. In certain circumstances, however, the need to conclude agreements on a one-to-one basis, and a fortiori, the individualized negotiation of their terms, can be too cumbersome. This is well illustrated by considering the situation of radio stations, which typically wish to broadcast a wide selection of the worldwide music repertoire. Radio stations would be forced to identify, and negotiate with, the rightsowner of each song or other musical composition that they seek to broadcast, with a view to concluding agreements with all of them. Given that the popular music repertoire is constantly evolving, this negotiation process would be constant. Clearly, the costs and efforts to secure the rights in the musical works concerned would be such an enormous burden for most radio stations that many of them would not be able to operate in a commercially viable manner. Ultimately, this would result in reduced consumer choice.
114. The inefficiencies described above associated with the individual exercise of rights are addressed by an intellectual property practice known as the "collective management of rights." [182] While the collective management of rights takes many forms and the practice is more prevalent in certain industries than in others, [183] one common feature shared by such systems is that they offer centralized access to a plurality of works for the benefit of users. In certain cases, the services of collective management organizations may be more elaborate.
115. For example, in the field of musical works where there is a long tradition of collective rights management, the system typically extends beyond the mere offering of centralized access and includes, in addition to documentation, also licensing and distribution, as the three pillars on which the collective management of the rights of public performance and broadcasting is based. The collective management organization negotiates with users (such as radio stations, broadcasters, discotheques, cinemas, restaurants and the like), or groups of users, and authorizes their use of copyrighted works from its repertoire against payment and on certain conditions. On the basis of its documentation (information on members and their works) and the programs submitted by users (for example, logs of music played on the radio), the collective management organization distributes copyright royalties to its members according to established distribution rules. A fee to cover administrative costs, and in certain countries also socio-cultural promotion activities, is generally deducted from the copyright royalties.
116. Collective management organizations tend to be organized on a territorial basis and, in order to better represent the interests of their members, national collecting societies have associated themselves at the regional or international level. Examples of such associations are the International Confederation of Societies of Authors and Composers (CISAC) [184] and the International Federation of Reprographic Reproduction Organisations (IFRRO). [185] Typically, in the field of musical works, contracts of mutual representation are concluded between the various national societies on the basis of which a particular national society is entitled to manage not only its own national repertoire, but also the foreign repertoire of the other society. In return, its own repertoire will be managed and protected in each foreign country by the national society with which the contract of mutual representation has been concluded. As a result of this network of agreements between the various national societies, each of them is in a position to license the entire music repertoire of the world, which, from the point of view of the user, is highly desirable.
(i) Digital Rights Management
117. The digitization of content, together with the increased reliance by rightsholders and intermediaries (including collecting societies) on information technology, and the Internet, is influencing the traditional means of licensing intellectual property rights, as described above. The application of information technology to facilitate the exploitation of rights is commonly referred to as "digital rights management" (DRM). DRM systems are aimed at enforcing certain business rules in respect of the use of content protected by intellectual property. Typically, these business rules concern questions of who is entitled to access a work, at what price and on which terms. These terms address questions such as whether a user is entitled to make any copies of the work (and, if so, how many), for how long a user is entitled to access a work; whether a user can excerpt the work or make changes to it; whether a user can access the work on one or on multiple devices, etc. In effect, DRM systems aim to automate the process of licensing works and of ensuring that license terms are complied with. The following elements are often associated with DRM systems: (1) identifiers, i.e., numbers or codes permitting the unique identification of a piece of content (comparable to, for example, the ISBN number for books); [186] (2) metadata, i.e., information about the piece of content which may include, for example, the identity of the rightsholder, the price for using the work, and any other terms of use; and (3) technological protection measures, i.e., systems designed to ensure that certain usage rules are complied with, in particular those concerning access and copy control. [187]
118. Legal support for DRM systems is to be found in the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), described above, in particular in their provisions on Obligations concerning Technological Measures (Article 11 of the WCT and Article 18 of the WPPT) and Rights Management Information (Article 12 of the WCT and Article 19 of the WPPT). [188] Because the technology holds the promise of curbing rampant piracy of copyright works, rightsowners have placed a great deal of faith in DRM, and technological protection measures in particular, as a means of enforcing their rights in the digital environment. Substantial investments have been made in recent years with a view to the development and deployment of the systems in question. This work is predominantly private-sector driven and many systems are already available, although not yet widely adopted by the market. One of the important issues that needs to be addressed is the need for interoperability, as many different proprietary systems would need to be able to function seamlessly together for them to become truly attractive to users. While there are many efforts aimed at establishing interoperable standards, the degree of consensus that is required among a broad range of industry sectors, as well as users, is a considerable challenge. [189] Nonetheless, mass market deployment of DRM systems is widely anticipated, as it is generally recognized that this likely would enhance legitimate access to copyright works on the Internet, to the benefit of users, intermediaries and content providers alike.
(ii) Trends in Licensing and Rights Management
119. The interplay between information technology, the digitization of content, the Internet and the exploitation of intellectual property rights is dynamic and it is particularly difficult to predict what the future will hold precisely. Notwithstanding, the following remarks can be made with respect to the future of licensing and management of rights in the digital environment, based on experience gained and lessons learnt in recent years.
(i) Approaches to managing intellectual property rights in the digital environment, as well as the type of licenses reflecting these approaches, will need to take account of the malleable and vaporous nature of digitized content. Typical and by now well known features of such content include the ease with which it can be transmitted from one device to another, its global accessibility once it is made available on the Internet, and the ease with which it can be reproduced, in the absence of any technical protection measures. Because of the characteristics of digitized content and the Internet, users have certain expectations with respect to the manner in which they wish to consume such content. To the extent such expectations are reasonably legitimate, rightsowners' market offerings (including the structures and terms of licenses), will be perceived as more attractive if they are consistent with them.
(ii) Increased reliance on licensing and contracts as a means of managing intellectual property is a likely future trend. As content has become more fluid and its means of delivery to users more variable, market offerings can now conveniently be tailored to suit the particular needs of individual users, or groups of users, sharing common requirements. A more diversified and adaptable range of products is reflected in a corresponding need for greater flexibility in the structure of legal relationships between content providers, intermediaries and consumers. Content providers, and, to an increasing extent, institutional users are of the view that contracts, licensing in particular, offer much needed flexibility in this regard. Accordingly, certain sectors of the intellectual property industry in recent years have increased their reliance on licensing as a means of making available content to users. An example of a sector in which this trend can be discerned is the scientific, technical and medical publishing industry.
(iii) Some have argued that information technology and the Internet are a threat to collective rights management organizations, because they would enable rightsowners to control and measure themselves directly the use of works. For a variety of reasons, however, the more informed view probably is that these phenomena will, in most cases, require collecting societies to re-engineer their business models and operating procedures, rather than jeopardize their very existence. In part, the difficulty results from the fact that collective rights management organizations, like much of the intellectual property system, are organized on the basis of territoriality. The entities in questions are often organized on a national basis, each of them having competence to grant licenses for their territory. However, if a person residing in a particular territority makes a work available on the Internet, it immediately becomes globally accessible (much more so than, for example, a broadcast originating from within a particular country). In an effort to resolve this problem, certain collective management organizations have been working towards enabling their system of mutual representation to make available to users global Internet licenses. [190]
(iv) A topic of increasing interest concerns the future of exceptions and limitations in the digital arena. While the WIPO Internet Treaties state that "contracting Parties [are permitted] to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws which have been considered acceptable under the Berne Convention," the question has been raised whether the broad use of licensing as a means of providing access to works, as well as the widespread deployment of technological protection measures, will not result in a situation where exceptions and limitations are rendered practically meaningless. The interface between technological protection measures, licensing, and limitations and exceptions is a complex and, as yet, poorly understood issue that is likely to engage industry, users, as well as policy makers, for quite some time.
(v) One, rather radical, method of dealing with loss of revenue for rightsowners resulting from digital piracy is the imposition of levies to compensate for the losses incurred. Levies can apply to any number of items, including, for instance, the hardware and devices purchased by users to access the pirated works. Resort to such levies, as a means of dealing with widespread infringing content in the digital age, recently has been observed in a number of countries. [191] Invariably, the imposition of levies is a highly controversial measure. Those who oppose them argue that they reflect a misguided attempt to find a "quick fix" to a complex problem, introducing market distortions and, ultimately, hurting consumers who suffer subsequent price increases. Others maintain that they are one of a few realistic and effective means of safeguarding the interests of rightsowners in the face of rampant digital and Internet piracy.
III. (b) TRADEMARKS AND OTHER RIGHTS IN DISTINCTIVE SIGNS
120. This Chapter addresses issues that have arisen in the field of trademark law, describing the changing importance of trademarks when used to identify enterprises online, before proceeding to some issues that have developed as a result of use of trademarks on the digital networks, such as meta tags and linking practices. It then focuses on the principle of territoriality that underlies the trademark system, before introducing WIPO's programs in this area, in particular the Joint Recommendation Concerning Provisions on the Protection of Marks, and Other Industrial Property Rights in Signs, on the Internet, and Joint Recommendation Concerning Provisions on The Protection of Well-Known Marks, and concluding with a description of the concept of unfair competition as it applies in the digital environment.
(i) IMPORTANCE OF TRADEMARKS ONLINE
121. Trademarks are an important tool in commerce, enabling consumers to identify the source of a product, and to link the product with its manufacturer in widely distributed markets. The exclusive right to the use of the mark, which may be of indefinite duration, enables the owner to build goodwill and reputation in its enterprise and to prevent others from misleading consumers by false association with an enterprise with which they are not connected.
122. Trademarks are of essential importance in e-commerce. It is clear that trademarks carry at least as much significance on the Internet as in the off-line world. Particularly following the downturn of the .com economy, online enterprises are focusing on building recognition and goodwill, so as to inspire confidence in themselves and in their brands, and to remain competitive. Consumers, operating in virtual markets where face-to-face interactions are infrequent and there is little or no opportunity to inspect goods or services before purchase, are willing to reward trusted sources offering competitive products. [192] In fact, a survey of e-commerce consumers reported that 80% of their decision whether to purchase is affected by issues beyond their online experience, and that most importance was placed on brand performance. [193]
123. There is a general international consensus that trademark protection under law should extend to the Internet, and that its scope should be neither less nor more extensive than the protection granted in the physical world. [194] While existing national or regional trademark law systems apply, together with the relevant international treaties, [195] these provisions are of a general nature, applying on a territorial basis, and are not tailored for the borderless world of the Internet. The challenges of this new medium of commerce are not limited to trademarks; they exist with regard to all kinds of distinctive signs online, including trade names and geographical indications.
(ii) DEVELOPMENTS IN USE OF TRADEMARKS ONLINE
124. Trademark owners also face new challenges with respect to use of their marks in the digital environment. In the current marketplace, it is estimated that a typical large business owns between 200 and 500 corporate, product and service identities, that need to be registered, maintained and defended. [196] A corporate presence on the Internet requires trademark owners to defend their rights against new forms of trademark abuse and across millions of discrete sites, in multiple languages and domains. For example, trademarks and logos may be used in a site or domain name in connection with pornographic or other objectionable sites, or by trade competitors to divert search engine traffic, or dilute or tarnish a brand.
125. One provider of digital brand management services, VeriSign, estimates that 70% of domain names associated with top brands are not registered by the true brand owner, prompting rightsholders to defensively register their marks as domain names, and take action to protect their mark through domain name dispute resolution procedures, as described in Chapter III(c). In addition to cybersquatting, trademark owners are facing new types of infringement, including user-traffic diversion through keywords and meta tags, or unauthorized linking and framing, as described below. Added to this, the Internet has vastly increased consumer choice by making available a global spread of online enterprises which, together with a new diversity of media channels and increased consumer control, has contributed to an erosion of brand loyalty. [197] In this environment, trademark owners may employ services of online brand management and "cybersurveillance" companies, that assist in the protection and enforcement of their trademark rights in a digital environment.
126. The means by which users locate businesses on the Internet has also changed. From the early development of the Internet, the domain name system has served to facilitate users' online navigation, using domain names and corresponding Internet Protocol (IP) numbers to identify computers connected to the network. Domain names, because they are easy to remember and tend to mirror the entity's trademark or business name, have functioned both on and offline (in advertising and marketing practices) as business identifiers, in a manner similar to trademarks. However, users also have alternative mechanisms to locate sites on the Web, mainly through search engines such as Google, Excite, AltaVista or Yahoo!, as well as Internet keywords. [198] The table below illustrates the relative accuracy of such search methods:
Website Reachability by Category of Request and by Search Method
|
Category of request |
% success
|
% success
|
% success
|
Sample size |
|
Top brand names |
95% |
96% |
61% |
100 |
|
Randomly-selected brand names |
5% |
21% |
1% |
100 |
|
Randomly-selected Boston Yellow Pages results |
14% |
46% |
7% |
100 |
|
Most selective colleges and universities in the United States of America |
50% |
99% |
69% |
100 |
|
Randomly-selected colleges and universities in the United States of America |
31% |
96% |
61% |
100 |
|
Overall (Average / Total) |
39% |
72% |
40% |
500 |
*Note: RealNames ceased business operations in June 2002, but is included as one example of a keyword system (see http://www.realnames.com).
Source: http://cyber.law.harvard.edu/people/edelman/dns-as-search /
127. Some Internet practices that may raise trademark issues, such as "hyperlinking" and "meta tagging", are important to facilitate users' navigation of the Web. Nevertheless, they raise concerns for trademark owners since they create associations and links, thereby increasing the risk of confusion, dilution or other forms of unfair exploitation of trademarks. A growing body of jurisprudence is developing in some countries, as courts and legislatures determine the limits of legal activity in this field. [199] While there are divergences of approach between countries based on their distinct national laws relating to trademarks, trade practices and unfair competition, it is difficult for enterprises to formulate a coherent marketing strategy for their activities in e-commerce. A number of these emerging practices are described below, namely: (i) use of trademarks as meta tags; (ii) sale of trademarks as keywords; (iii) pop-up advertisements; (iv) mousetrapping; and (v) linking and framing.
(a) Use of Trademarks as Meta Tags
128. A "meta tag" or "meta data" is a keyword or phrase embedded in a website's HTML (hypertext markup language) code as a means for Internet search engines to identify and categorize the contents of the website. [200] Meta tags are not visible to normal users on the website itself (although they can be made visible together with the source code of the page), however, a search engine seeking particular keywords will find and list that particular site. The more often a keyword appears in the hidden code, the higher a search engine will rank the site in its search results. In various jurisdictions, trademark owners have challenged the unauthorized use of their trademark as a meta tag. [201]
129. However, a trademark employed as a meta tag, because it is used in a way that is invisible to the average viewer, is not used primarily to distinguish particular goods or services, a finding that is generally necessary to establish trademark infringement. In some jurisdictions, the courts have nevertheless found that companies' use of competitors' names as meta tags constitutes unfair competition, [202] including the Indian case of Tata Sons Limited v. Bodacious Tatas, [203] and the Italian case of Genertel SpA v. Crowe Italia Srl. [204] In the United States of America, in the case of Brookfield Communications Inc. v. West Coast Entertainment Corp, [205] the Court regarded the practice of meta tagging as potential trademark infringement, stating that such use might suggest sponsorship or authorization by the trademark owner, or that consumers looking for the products of the trademark owner might be misdirected and diverted to a competitor's website and be at least initially confused in their search for the trademarked goods. [206]
130. However, while as a general rule the unauthorized use of a trademark as a meta tag is considered unlawful, this approach is not universal. A number of cases brought by Playboy Magazine illustrate the complexity of the law in this area, and the diversity of outcomes even within one legal jurisdiction. In the American cases of Playboy Enterprises Inc. v. Calvin Designer Label, [207] and Playboy Enterprises, Inc. v. AsiaFocus International, Inc., [208] the Courts prevented the defendants from using the marks "Playboy" and "Playmate" as meta tags on their websites, as well as in related domain names. In the case of Playboy Enterprises Inc. v. Welles, it was held that use as a meta tag of the Playmate trademark by a former Playmate of the year, to enable consumers to locate her website, was a fair use. [209] Similarly, in Playboy Enterprises v. Netscape Communications, [210] the Court found that the use of trademarks as meta tags by the defendant's search engines, which linked adult entertainment advertisements to the trademarked terms, was in fair use.
131. It is becoming clear that the courts may allow the use of trademarks as meta tags where such use is not misleading or unfair. In the case of Numtec Interstahl, the Austrian Supreme Court held that it was legitimate for the defendant to use the plaintiff's trademark as a meta tag on its website, because such use enabled the public to be informed about products the plaintiff produced under patent, and because the average user would not be confused as to the ownership of the trademark. [211] Similarly, the Regional Trial Court in the Philippines, in Philippine Long Distance Telephone Company, Inc. v. Philippine League for Democratic Telecommunications, Inc. and Gerardo B. Kaimo, found that the defendant's use of meta tags on a parody site clearly used to criticize the plaintiff's business schemes and raise public awareness of political issues, was not likely to confuse or mislead users and therefore did not amount to trademark infringement. [212] In the American case of Bihari v. Gross, the use of a meta tag was found to be in fair use when the two parties are not competitors, and the tag was used by the defendant on a site critical of the plaintiff's business and therefore unlikely to cause confusion. [213] Similarly, in the case of Promatek Industries Ltd. v. Equitrac Corp., the U.S. Court of Appeals modified an earlier opinion to clarify that use of another's trademark as a meta tag may be permissible if it is not deceptive, stating: "It is not the case that trademarks can never appear in meta tags, but that they may only do so where a legitimate use of a trademark is being made." [214]
(b) Sale of Trademarks as Keywords
132. As noted above, Internet users are increasingly resorting to search engines to locate information online, as an alternative to relying on domain names to navigate the Web. [215] Users request a search of specified terms and the search engine then uses a mixture of manual and automated methods to locate those keywords on the Web, either in meta tags, URLs, keyword listing or based on a history of visits. Based upon this data, the search engine attempts to rank the information so that more relevant information is provided first. Most site owners seek to maximize their chance of being highly ranked in search results, because the higher the volume of users to a site, the higher the potential advertising revenue. Some of these search engines "sell" keywords to advertisers who want to target their marketing, such that, whenever the keyword is entered into the search engine, an advertisement appears along with any search results. Retailers, for example, have purchased keywords so that their banner advertisements are displayed whenever certain trademarked products are the object of a search. [216]
133. This practice has been challenged by trademark owners as a diversion of customers from their own website, or from the websites of their preferred or authorized web retailers. However the legal treatment of such cases is still developing. In the abovementioned case of Playboy Enterprises Inc. v. Netscape Communications Corporation, the Court denied preliminary relief stating that the "Playboy" and "Playmate" keywords sold by the defendant were used by searchers as common or generic words, not the marks. [217] In the pending case of Mark Nutritionals Inc. v. FindWhat Services Inc., the plaintiff has filed suit against a number of Internet service providers, alleging that the search engines' sale of keywords containing its trademark altered the search results related to their product in a manner that amounted to trademark infringement and dilution. [218]
(c) Pop-Up Advertisements
134. The pop-up ad is a window, not initiated by the user that appears on top of the content page when a site is loaded. A user who clicks on the pop-up graphic will be redirected to the advertiser's website, otherwise, and unless closed by the user, the pop-up window will close automatically after a short period of time. [219] Pop-up ads are used as marketing tools designed to capture consumers' attention, and are based on software designed to track users' online activity and then deliver targeted advertising based on their preferences.
135. In the American case of Washingtonpost.Newsweek Interactive Co. v. Gator Corp., the Court issued a preliminary injunction that prohibited the defendant from enabling third-party advertising to appear on a user's computer screen while the user was viewing websites owned or affiliated with the plaintiffs, who were 16 online news companies. [220] The Court found that the software violated the plaintiffs' trademarks by causing pop-up advertising to appear in proximity to them.
(d) Mousetrapping
136. "Mousetrapping" is an aggressive marketing technique that forces users to remain on a specific website, sometimes while disabling their browser functions or flooding them with pop-up ads. Whenever the user tries to leave the site by using the "back", "forward" or "close" buttons, a new window is automatically opened that prevents the browser from leaving the site. To exit the loop, the user is forced to end the task or reboot his computer. [221] A recent court decision at the suit of the United States Federal Trade Commission permanently barred the defendant from diverting or obstructing consumers on the Internet and from launching websites or webpages that belonged to unrelated third parties. In that case, the defendant was registering Internet domain names that were misspellings or versions of legitimate domain names and, once consumers arrived on the defendant's sites, they were unable to exit. [222]
(e) Linking and framing
137. As described above in relation to copyright, [223] linking technologies enable Internet users to access content stored in the files of millions of individual computers and enable users to use links to retrieve information from files on the same or other websites. [224] However, linking can also raise concerns of trademark infringement if it explicitly or implicitly suggests an unwarranted association between the linking and linked sites, and leads a user to believe that an unassociated web page is affiliated, approved, or sponsored by the trademark owner. In the United States case of Ticketmaster Corp. v. Microsoft Corp., [225] the plaintiff alleged that a deep link from the defendant's site to events pages within its site implied a false association that constituted unfair and deceptive trade practices and a dilution of its trademarks, in addition to copyright infringement, trespass and false advertising. The deep links, which bypassed the plaintiff's home page and its associated advertising, potentially diminishing its revenue, also conflicted with the plaintiff's contractual agreements with other companies that had paid to link to its site or advertise on its home page. However, the District Court did not address the issues as the case was settled. [226] In the case of Ford Motor Company v. 2600 Enterprises, [227] however, the Court denied the claims for alleged unfair competition and trademark dilution as a result of linking, because the defendants had not used the plaintiff's mark in commerce, nor in connection with the sale, or advertising for sale, of any goods or services.
138. The related practice of framing, also described above in relation to copyright, [228] equally raises concerns of trademark infringement because of its potential to mislead or confuse viewers as to the origin of the site and the goods and services it displays. In contrast to linking, users viewing framed material usually remain on the original site and view content from both sites, possibly without being aware that the material has been called up from another site, raising the potential for trademark liability.
139. In the American case of The Washington Post v. Total News, Inc., [229] six major news organizations whose content had been framed by the defendant alleged misappropriation, trademark dilution and infringement, false and deceptive advertising, unfair trade practices, copyright infringement, and tortious interference with their advertising contracts. The defendant in this case had framed news content from the plaintiff's sites with advertisements that it had itself sold, thereby diverting advertising revenue and, by maintaining its own site address for the material, made it appear that the news originated from its site. A settlement was reached that permitted the defendant to maintain its links to the news sites, upon agreement to cease framing the plaintiff's material in association with any third party advertising or its URL.
(iii) PRINCIPLE OF TERRITORIALITY AND USE OF TRADEMARKS ONLINE
140. The developments described above share a number of common legal principles, arising from use of a trademark as a sign on the Internet, for example as meta tags or domain names. To a large extent, these relate to the territorial nature of trademark law in the context of trademarks used on a global medium such as the Internet. When a trademark is used on the Internet it is immediately visible to a global audience and may be considered to have global effect. This particular feature of the Internet makes it difficult for businesses to foresee in which countries their business activities might become legally relevant. Due to the particularities of Internet technology, it is often difficult to fit the "use" of a trademark on the Internet into traditional legal concepts of use in the physical world. The issues described below are addressed further in part (iv) of this Chapter, in the context of the WIPO Joint Recommendation Concerning Provisions on the Protection of Marks, and Other Industrial Property Rights in Signs, on the Internet, described below. [230]
(a) Acquisition of Trademark Rights Through Use of a Sign on the Internet
141. In some countries, where trademark protection depends on prior use of the mark in that country, the question arises whether use on the Internet can satisfy such a use requirement and, if so, what kind of use would qualify as "genuine use." This is important because, in most countries, a trademark registration is subject to cancellation if the trademark has not been used within a certain period of time. [231] It seems that use of a trademark on the Internet may qualify as "genuine use" for the purposes of use requirements. [232] The trademark owner will have to show that its trademark was actually present in that market, for example by proving actual sales or other commercially motivated relationships with customers in a country. [233] This can be difficult if the trademark owner delivers goods or services exclusively over the Internet, or, in particular, if the goods or services are provided for free as in the case of Internet search engines, which have little or no physical presence outside the Internet.
(b) Infringement of Trademark Rights Through Use of a Sign on the Internet
142. The use of a sign on the Internet can infringe a trademark only if such use is deemed to have taken place in the country where the trademark enjoys protection. The question arises under what conditions the appearance of a mark on the Internet might constitute use in a particular forum and give rise to infringement. The notion of infringement can either be extensive or restrictive. Under an extensive concept of infringement, it would suffice that a sign is visible on a computer screen in the country where a conflicting right exists. [234] The exclusive right in a trademark would then have an almost worldwide effect. It could even be used to block use that was neither aimed at a country, nor had an effect in that country over and above the visibility of the sign on a computer screen. Under this view, use of a sign on the Internet could provoke infringement claims in potentially every country in the world. [235]
143. Under a more restrictive concept, the finding of an infringement would require a connection between the use of the sign on the Internet and the country in which the trademark enjoys protection. While factors for establishing such a link with a particular country need to be considered, different countries may adopt different standards. If it were possible to agree on a set of criteria at the international level, it would be easier for businesses to foresee in which countries their activities on the Internet might become legally relevant. Under such an approach two further questions might be usefully addressed: First, would the finding of a connection with particular countries require that the user intended to produce an effect in those countries, or that such an effect was at least foreseeable? Secondly, would it be necessary to distinguish between various degrees of interactivity of the website on which the sign is used? [236] Moreover, use in the context of advertising might have to be treated differently from use on websites for the purchase of goods or services. [237]
144. Related to these questions is the question of whether users of a sign on the Internet should be able to avoid a link with a particular country by the placement of a disclaimer on their website. [238] Such statements may provide a flexible tool for enterprises to territorialize their use of a sign on the Internet, and to avoid infringement claims in particular territories where conflicting rights might exist. They pose, however, a number of problems: first, the user of a sign might have to search for conflicting rights all over the world in order to determine whether to disclaim particular countries ("This product is not available in countries X, Y and Z") or other individual rightholders ("We have no relationship with A, B, and C"). The practical difficulties of doing so would be increased by the fact that such statements would probably have to appear in the languages used in each of these countries. Second, such statements would always bear a residual risk of confusion.
(c) Acceptable Unauthorized Use
145. Legal systems may provide exceptions for the "fair use" of a sign that is protected as a trademark. [239] Such exceptions often apply when a sign is used fairly and in good faith in a purely descriptive or informative manner. It is also often stipulated that such use should not extend beyond that which is necessary to identify the person, entity or the goods or services, and that nothing is done in connection with the sign which might suggest endorsement or sponsorship by the trademark holder. Such exceptions may be equally applicable when a sign is used on the Internet. [240] Other examples of acceptable unauthorized trademark use include use in a non-commercial context or use that is protected by the right of free speech, such as consumer criticism expressed in relation to a particular trademark. [241]
146. Since approaches differ from country to country, international harmonized criteria could increase predictability in this context, for the benefit of participants in electronic commerce. It would not be realistic, or for that matter desirable, for such a harmonized approach to attempt to regulate every new means of using a distinctive sign on the Internet. In order to be technologically neutral, any attempt might only seek to identify general standards for distinguishing acceptable from unacceptable practices. In this respect, two different approaches might be useful: an attempt could be made to develop criteria concerning unacceptable use, or alternatively, definition could, in a general way, be given to forms of "fair use" that each country would treat as acceptable in its territory. [242]
(d) Global Effect of Injunctions
147. The scope of a trademark right is determined not only by defining when such right is infringed, but also by specifying the remedies available to the rightsholder when an infringement has taken place. If a trademark right has been infringed by the use of a sign on the Internet, the question arises whether its owner should be able to demand, with the help of the courts, that the defendant cease every use of the sign throughout the Internet? [243] Such an injunction would have an effect that is as global as the Internet itself. If traditional trademark law is to be translated into cyberspace, a national (and thus territorially limited) trademark right should not give rise to an exclusive right throughout the worldwide expanse of this medium. It would, therefore, be appropriate if available remedies were, as far as possible, limited to the territory for which the owner holds an exclusive right. [244] Courts might have to take a creative approach in framing equitable relief, such as obliging the user of a sign on the Internet to take reasonable measures for avoiding contacts with the territory in which the trademark owner holds an exclusive right. This could be effected, for example, by placing adequate statements on the website (e.g., disclaimers, as above), by using technical mechanisms to block access by Internet users located in a particular country, or by refusing to deliver goods or services to customers located in a particular territory. Concurrent users could also be encouraged to share a common gateway page or portal, or to mutually provide links to their respective websites. [245]
148. Internet-wide injunctions, however, should not be completely excluded as a possible remedy. Especially in cases where the use of a sign on the Internet has intentionally and in bad faith targeted a trademark right, [246] it may be appropriate to prohibit every form of use of the conflicting sign on the Internet in order to remove its effect on the territory (or territories) in which the trademark enjoys protection, and to prevent such use from violating the legitimate interest of the trademark holder.
(e) Enabling Co-existence of Rights on the Internet
149. Because of the territoriality of trademark rights, identical or confusingly similar trademarks can be held in different countries by different owners who are completely unrelated to one another. [247] This coexistence can be more difficult on the Internet where a sign may be visible on computer screens (or other digital devices) across the world. The user of a trademark on the Internet might become involved in a dispute in a foreign jurisdiction, under a law that does not recognize the user's right to the disputed trademark, but which accords rights in it to another person. What had been coexistence of rights in the physical world becomes a conflict between rights on the Internet.
150. Such conflicts can lead to a situation where conflicting rightsholders may attempt to block each other from using their sign on the Internet, with the help of their national courts, for example, where one trademark holder has secured an injunction in its jurisdiction against the competing user, who, in turn, has done the same in its jurisdiction. It would seem, therefore, that this problem has to be addressed at its roots, that is, in trademark law, in order to give legitimate right owners some certainty that they can use their trademarks on the Internet without having to fear claims raised against them by rightholders in other jurisdictions.
151. One approach might be the adoption of a general principle according to which every holder of a right in a distinctive sign may use that sign on the Internet concurrently with any other rightholder, subject to certain limitations. Such a principle might be regarded as an expression of the independence of national trademark rights provided for by Article 6(3) of the Paris Convention. In court, the fact that a defendant holds an exclusive right in the sign in another country could form a defense or a rebuttable presumption of legitimate use, the factual preconditions for which might have to be proved by the defendant.
152. Such a principle for the coexistence of legitimate rights could have to be limited in two respects in order to safeguard the interests of trademark owners. First, the risk of confusion should be reduced to a minimum. To this effect, it could be required that the user of the sign clearly indicate where the trademark is protected, and that other users of the sign have no relationship with it. The disclaimer statements described above could be used. A risk of confusion, however, could not be avoided completely, since Internet users searching for a particular trademark owner might call up the website of a concurrent user and only then, after reading a clarifying statement on that website, realize that they did not find what they were looking for. This residual risk of confusion, however, may be outweighed by the fact that, in cases of conflicts between legitimate (national or regional) rights, the principle enables each rightholder to use its right on the Internet.
153. Second, coexistence would not be appropriate if one of the users had registered or used its trademark in bad faith. Only good faith use should profit from the limitation of infringement claims. In court, bad faith could serve as a means to rebut the presumption of legitimate use. The facts constituting bad faith registration or use might then need to be proven by the plaintiff. In determining bad faith, it might be possible to draw on Article 4(5)(c) of the WIPO Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, according to which knowledge or reason to know of the conflicting mark is to be taken into account. [248] A finding of bad faith could encompass situations where one rightsholder has acquired or uses a sign with a view to profit from the goodwill associated with the other trademark. Additional criteria would have to be determined in order to render the application of the bad faith exception predictable.
(iv) WIPO JOINT RECOMMENDATION ON PROTECTION OF MARKS ON THE INTERNET
154. Based on preparatory work by the Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications (SCT), [249] the Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of WIPO adopted, on the occasion of the thirty-sixth session of the Assemblies of the Member States of WIPO, in September 2001, the WIPO Joint Recommendation Concerning the Protection of Marks, and Other Industrial Property Rights in Signs on the Internet (the "Joint Recommendation"). [250] The Joint Recommendation addresses the complex questions raised above, resulting from the tension between the global nature of the Internet and the territorial rights of marks.
155. The Preamble to the Joint Recommendation makes clear that it does not purport to be a trademark law for the Internet, but is intended to guide the application of existing national or regional laws with respect to legal problems resulting from the use of a sign on the Internet. Emphasizing the "global nature" of the Internet, the Joint Recommendation aims at providing the clearest possible legal framework for trademark owners who wish to use their marks on the Internet and to participate in the development of e-commerce upon it. Its purpose is, therefore, to help competent authorities [251] to determine whether, under the applicable law, the use of a sign on the Internet has contributed to the acquisition, maintenance or infringement of a mark or other industrial property right in the sign, or whether such use constitutes an act of unfair competition, and thereafter to apply appropriate remedies.
156. The determination of the applicable law itself is not addressed by the Joint Recommendation, but is left to the principles of private international law, as they are applied in each Member State. The provisions address three main questions:
- When can use of a sign on the Internet be considered to have taken place in a particular country?
- How can those who own conflicting rights in identical or similar signs be enabled to use these signs concurrently on the Internet?
- How can courts take account of the territorial basis of industrial property rights in signs when determining remedies?
157. The first question is relevant for determining whether use on the Internet has contributed to establishing, maintaining or infringing an industrial property right in a sign in a particular country. The provisions are based on the assumption that not each and every use of a sign on the Internet should be treated as taking place in the Member State concerned, even though it might be accessible to Internet users based in that country. This fact is expressed in the term "commercial effect." [252] The Joint Recommendation provides that only use that has commercial repercussions in a given Member State, or, in other words, use that has a "commercial effect" in a Member State, shall be treated as having taken place in that Member State (Article 2). The provisions introduce the words "use of a sign on the Internet in a Member State" as a shorthand expression for use of a sign on the Internet, which is deemed to have taken place in a Member State as a result of its commercial effect.
158. The determination of whether use of a sign on the Internet has produced a commercial effect in a particular Member State, and whether such use can be deemed to have taken place in that Member State, is to be made on the basis of all relevant circumstances. A competent authority is therefore free to determine which factors are relevant in a given case. The provisions, however, provide a detailed but non-exhaustive list of factors, which can be relevant for determining commercial effect, as follows:
- doing or planning to do business in a Member State;
- character and level of commercial activity carried out in a Member State;
- location of customers;
- use of a "territorial disclaimer" stating that the goods or services offered are not available or only available in particular Member States;
- actual delivery of goods or services to customers located in a Member State;
- specific language use on the Internet site;
- prices indicated in the currency of a Member State;
- address or contact information in a Member state;
- interactivity of the website; and
- registration of the website under a country code top level domain.
The provision states that the list of factors is neither cumulative nor exhaustive, but functions as a checklist of factors which might be relevant in a given case, without obliging the competent authority to express an opinion about every listed factor. It follows the model of the Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, which also sets out a list of guiding factors for the determination of a well-known mark. [253]
159. The provisions are only applicable to rights that are protected in a commercial context. In so far as Member States also protect certain rights in signs, such as personality rights, in a purely non-commercial context, they are free to either grant such protection in relation to use of a sign on the Internet independently of whether such use has a commercial effect, or to apply the present provisions.
160. The second question is a direct consequence of the tension between territorial rights and a global medium. Because of that territoriality, different owners can hold industrial property rights in identical or similar signs in different countries. This can create problems if a sign is used on the Internet. Because of the necessarily global nature of the Internet, such use might be considered as infringing a right under the law of a Member State in which the right of the user is not recognized. As mentioned above, what was coexistence of rights in the real world turns into potential "conflict of rights" on the Internet. In the discussions taking place in the SCT, it was emphasized that such conflicts should be resolved on the basis of a fair balance of interest, providing effective protection for rightholders without unreasonably burdening commercial activities on the Internet.
161. The provisions first restate the principle according to which, except where otherwise provided for, there shall be liability in a Member State under the applicable law when a right is infringed, or an act of unfair competition is committed, through use of a sign on the Internet in that Member State. The provisions then introduce a two-step procedure, called a "notice and avoidance of conflict" procedure (Part V). Rightsholders who use their sign in good faith are exempt from liability up to the point when they are notified of a conflicting right (Article 9). As a consequence, they would not be subjected to any injunction, or held liable for any damages occurring, before notification. Users would, therefore, not be forced to undertake a worldwide search for conflicting registered or unregistered rights before using their sign on the Internet. This would have been almost impossible to achieve, and very costly, and certainly detrimental to the development of commerce over digital networks.
162. Notifications, when sent by the rightsholder or her representative, by mail, e-mail or facsimile, in the language or one of the languages used in connection with the sign on the Internet, are effective, pursuant to Article 11, if they include the following:
- the right alleged to be infringed;
- the identity of the rightsowner and information reasonably sufficient to contact him or his representative by mail, e-mail or facsimile;
- the Member State in which that right is protected;
- relevant details of such protection, allowing the user to assess the existence, nature and scope of that right; and
- the use that is claimed to infringe the right.
As a second step of the procedure, users who have received a notification relating to a "conflicting" right, have to take reasonable measures for avoiding or ending the conflict (Article 10). If they fail to do so, they may be subject to liability.
163. In order to provide rightholders with a sufficient degree of legal certainty as to how to avoid liability for the infringement of conflicting rights which they are already aware of, Member States would have to accept a "qualified disclaimer" as a sufficient measure to avoid liability (Article 12). Such disclaimers are statements designed to avoid a commercial effect in a particular country, and to avoid confusion with the other rightsholder. The user would also have to abide by his statement by asking customers where they are located, and refusing delivery to those who have indicated that they are based in the country disclaimed. Users would, however, not be required to verify the statements made by their customers because this is almost impossible in cases where the whole transaction takes place over the Internet.
164. The third question also addresses a problem resulting from the tension between territorial rights and a global medium. An injunction to cease every use of a sign on the Internet would go far beyond the territory in which a conflicting industrial property right in that sign exists. It would have an effect, which is as global as the Internet. A decision as to remedies should therefore take the territorial limitation of industrial property rights in marks or other signs into account. Remedies should be limited, as far as possible, to the territory in which the industrial property right is recognized, and they should only be available if the allegedly infringing use of the sign can be deemed to have taken place in that territory. This is determined with regard to the "commercial effect" of such use in the Member State in question. Thus, the "commercial effect" of Internet use should serve as a yardstick for determining a "proportionate" remedy. Use of a sign on the Internet that infringes an industrial property right in a Member State should not be prohibited any more than is proportionate to the commercial effect that such use has produced in that Member State (Article 13). Injunctions should generally be limited to what is necessary to prevent or remove the commercial effect in the Member State (or the Member States) in which the infringed right is protected, and damages should be granted only for the commercial effect of the use in that Member State.
165. The provisions require courts to be creative in considering limitations of use designed, on the one hand, to avoid a commercial effect in the Member State, or in the Member States, in which the infringed right is protected, and to avoid any confusion with the owner of that right on the other hand, such as "qualified disclaimers", gateway web pages and the like (Article 14). Prohibitions to cease every use of a sign on the Internet might still be necessary in certain cases. However, the provisions exempt such users from such "global injunctions" if they hold a right in the sign they use on the Internet and do not act in bad faith (Article 15).
166. The Joint Recommendation also requires Member States to protect industrial property rights against new and emerging infringing uses, as they occur on the Internet. Article 6 requires that "[a]ny use of a sign on the Internet, including forms of use that are made possible by technological advances, shall be taken into consideration for determining whether a right under the applicable law of a Member State has been infringed, or whether that use amounts to an act of unfair competition". It is envisaged that this will provide for use of marks and signs in banner advertisements, when sold or purchased as keywords and in meta tags, as well as future uses as they become evident.
(v) WIPO JOINT RECOMMENDATION ON WELL-KNOWN MARKS
167. Because of the heightened attention that fame attracts, well-known marks have for a long time been considered to warrant special protection, over and above that accorded to other, ordinary marks under intellectual property law. [254] That special protection is well established in the Paris Convention as well as in other regional or international agreements. [255] While there is an international obligation to accord protection to well-known marks, there exists no established treaty definition of what constitutes such a mark. It is left to the appreciation of the competent authority in the country where protection is asserted. [256]
168. Well-known marks have been the special target of a variety of abusive practices on the Internet. WIPO, through the SCT, has been working to develop provisions in this area, which were adopted as a Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks by the WIPO General Assembly and the Paris Union Assembly in September 1999. [257] The provisions intend to clarify, consolidate and supplement the existing international protection of well-known marks, as established by Article 6 bis of the Paris Convention and Articles 16.2 and 16.3 of the TRIPS Agreement. In particular, the Joint Recommendation in Article 2 contains a list of factors that may be used by a competent authority to determine whether a mark is well-known in its territory. [258] While the Joint Recommendation does not have the force and effect of a treaty, Member States may consider the use of any of these provisions as guidelines for the protection of well-known marks.
169. The Joint Recommendation (Article 6) expressly addresses conflicts between well-known marks and domain names. According to this provision, a domain name shall be deemed to be in conflict with a well-known mark at least where that domain name, or an essential part thereof, constitutes a reproduction, an imitation, a translation or a transliteration of the well-known mark, and the domain name has been used or registered in "bad faith." It is understood that "bad faith" will include the cases that are currently known as "cybersquatting." In this regard, WIPO, in the recommendations in the Report of the first WIPO Internet Domain Name Process, developed a definition of the abusive, bad faith registration of a domain name, that was subsequently incorporated into the Uniform Domain Name Dispute Resolution Policy (UDRP), by the Internet Corporation for Assigned Names and Numbers (ICANN). [259]
(vi) UNFAIR COMPETITION
170. Commerce means competition, and where there is competition, acts of unfair competition are liable to occur. E-commerce is no exception. This new channel of commerce has, for some time, been regarded as a "wild west", where almost anything can and does happen. E-commerce will realize its potential, however, only if some scope of protection and recourse against acts of unfair competition is provided. Protection against unfair competition supplements the protection of intellectual property rights. Without such protection, companies are likely to gauge the risks of damage to their reputations, loss of customers and liability from engaging in e-commerce, with the threatened consequence that innovation and freedom of competition is stifled.
171. Whereas issues concerning trademarks and the Internet have been at the forefront of discussions, questions relating to acts of unfair competition have attracted much less attention. Protection against unfair competition, however, covers an even broader scope of issues relevant for electronic commerce. It provides a legal framework for all forms of marketing, and it supplements the protection of intellectual property through statutory rights. So far, e-commerce has not been subject to specific regulations dealing with matters of unfair competition. National or regional laws apply together with international provisions contained in the Paris Convention [260] and the TRIPS Agreement. [261] The application of these rules to e-commerce, however, poses a number of problems.
172. Because marketing activities on the Internet may be subjected to a variety of often contradicting legal systems, the development of marketing strategies in e-commerce becomes more difficult. What is allowed in one country may be forbidden or strictly regulated in another. Even though Article 10 bis of the Paris Convention and Article 39 of the TRIPS Agreement give some guidance as to the internationally applicable rules for the protection against unfair competition, there remain many areas which are regulated differently in various national legal systems. For example, comparative advertising and bonus or discount schemes are forbidden in some countries, generally allowed in others, and more or less strictly regulated in still other countries. Such regulatory differences affect the free circulation of goods or services in the digital environment.
173. Experience has already shown that enterprises cannot simply continue their habitual marketing efforts online. They have to adapt to and use the particular technical features of the Internet, such as its interactivity and support of multimedia applications. As the most flexible part of industrial property law, unfair competition law may offer solutions to the new problems that have arisen in e-commerce. [262] Nevertheless, problems may arise with regard to the following issues:
(a) Interactive Marketing Practices
174. Because e-commerce relies on interactive contacts with prospective customers, attracting their attention is a core issue. Online marketing often uses strong incentives such as lotteries, free gifts or rebates, and tends towards more aggressive practices, such as comparative advertising or unsolicited e-mails (spamming). With the broadband technologies that will become available in the next few years, new forms of "immersive" marketing may also become prevalent. [263] Under a number of legal systems, such inducements may be considered contrary to honest trade practices. Should the standard for establishing unfair practices in e-commerce take the specific nature of the medium into account? Given the medium's compelling interactivity, should more stringent standards be considered?
(b) Transparency and Privacy Concerns
175. In an interactive medium like the Internet, the safeguarding of transparency and privacy is of particular importance. Unfair competition law may have to include rules requiring a clear distinction between informative text and advertising, and protecting consumers against the unauthorized collection of data for commercial purposes. Another related problem that may have to be addressed, noted above, is the flooding of users with unsolicited advertising and spam mail.
(c) National Versus International Standards of "Unfair" Marketing Practices
176. Whether a particular statement is misleading will usually be determined with regard to the public to which it is addressed. But marketing practices in e-commerce are often directed at a public in more than one country. What can be misunderstood in one country might be perfectly clear in another. Should marketing online be required to take into account the level of knowledge or the understanding of the audience in every country where the message can be received, or at least in every country foreseeably affected by it? Or should it be enough for an advertiser to show that a statement was not liable to be misunderstood in a "home country"?
(d) Trade Secrets
177. The protection of trade secrets is in many countries covered by unfair competition law. The protection of trade secrets on the digital networks relies heavily on technological measures for information security, especially because after a trade secret has been stolen and posted on the Internet, courts sometimes experience difficulty finding the "secrecy" element of a trade secret. Secrecy issues are therefore of particular importance in the digital environment.
III. (c) DOMAIN NAMES
178. This Chapter introduces the topic of domain names, as they relate to intellectual property issues connected with the Internet domain name system (DNS). Although not currently classified as a form of intellectual property, domain names as identifiers function in a manner similar to trademarks, and recent developments in the DNS and in connection with the Internet Corporation for Assigned Names and Numbers (ICANN), established to coordinate the DNS, raise significant issues for the intellectual property system. The Chapter concludes by addressing WIPO's programs in the field of domain names, and the work of the WIPO Arbitration and Mediation Center in the area of domain name dispute resolution resolving domain name disputes.
(i) INTRODUCTION TO DOMAIN NAMES
179. Domain names are Internet addresses in simplified form, designed to enable users to locate sites more easily. [264] They can be registered in the "generic top-level domains" (gTLDs), such as .com, .org, .net, .biz or .info, or any of some 243 "country code top-level domains" (ccTLDs), such as .ch (Switzerland), .fr (France) or .za (South Africa).
180. In addition to their function as locators of Internet sites, domain names have a function as identifiers of businesses and their goods or services on the Internet, which gives them an economic value comparable to that of other identifiers. This characteristic of domain names has given rise to a great many ownership disputes with other signs that existed prior to the advent of the Internet and were protected by intellectual property rights, such as trademarks. As noted in the WIPO Primer on Electronic Commerce and Intellectual Property Issues (WIPO Primer), [265] published in May 2000, the tension between domain names and other identifiers is largely a result of the incongruous nature of the systems to which each type of identifier belongs; the DNS is to a large extent managed by the private sector, and gives rise to registrations that result in a global presence, accessible from anywhere in the world - while the intellectual property system is managed by public authorities according to the principle of territoriality, giving rise to rights that can only be exercised in a specific territory. The tension has been heightened by certain practices that involve persons abusively registering as domain names distinctive signs, especially trademarks, with a view to subsequently selling the domain names to the owners of the identifiers, or simply taking unfair advantage of the goodwill associated with them.
181. Among the solutions found to the question of the interface between domain names and intellectual property rights, one of the most significant has been the entry into force of the Uniform Domain Name Dispute Resolution Policy (UDRP). [266] The UDRP was adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) [267] on August 24, 1999. The procedure introduced by the Policy allows trademark owners to settle cases of abusive domain name registration (cybersquatting) without resorting to national courts. Upon accreditation by ICANN, the WIPO Arbitration and Mediation Center began to provide its services for the settlement of disputes concerning gTLDs and certain ccTLDs that had voluntarily adopted the UDRP.
182. At the same time, on the basis of the final Report of the first WIPO Internet Domain Name Process, [268] certain issues called for further reflection. Those issues had to do with the wrongful registration of domain names that infringed designations other than trademarks, such as International Nonproprietary Names (INNs) for Pharmaceutical Substances, names of intergovernmental organizations, names of persons, trade names and geographical indications like geographical names and indications of source. In addition, the Report emphasized the concern of the owners of intellectual property rights regarding the introduction of new gTLDs, fearing as they did the spread to the new domains of the abusive registration practices suffered in existing gTLDs. [269]
183. The past two years have seen significant developments in the context of intellectual property and domain names. Those developments are considered in detail in Section II of this Chapter. The Internet landscape has itself recently undergone considerable change with respect to both the identifiers that are used upon it (including multilingual domain names and keywords), as well as issues related to the organization, management and coordination of the DNS (including the introduction of new gTLDs, emergence of multiple roots, and ICANN reform). These developments, described below, have a bearing on intellectual property concerns.
(ii) RECENT DEVELOPMENTS CONCERNING DOMAIN NAMES AND INTELLECTUAL PROPERTY
(a) New gTLDs
184. The introduction of new generic top-level domains (gTLDs) to complement those already existing (.com, .org, .net, .edu, .gov, .mil and .int) has been the subject of intense debate for a number of years. ICANN undertook a long process that included: the publication of criteria for the evaluation of proposed new TLDs, a request for proposals, publication of the non-confidential parts of the 47 proposals received, a period set aside for comments from the public and the publication of the report on the evaluation of the proposals received. Finally, on November 16, 2000, [270] ICANN authorized the inclusion of seven new gTLDs in the DNS. The new gTLDs are: .aero (for the aeronautical industry), [271] .biz (for business activities), [272] .coop (for accredited cooperatives),[273] .info (for various activities), [274] .museum (for museums), [275] . name (for personal names) [276] and .pro (for professional entities). [277]
185. The new gTLDs fall into two categories: (i) the "unsponsored" gTLDs (.biz, .info, .name and .pro), which operate under policies established by "the global Internet community directly through the ICANN process," [278] ; and (ii) the "sponsored" gTLDs (.aero, .coop and .museum), each being "a specialized TLD that has a sponsoring organization representing the narrower community that is most affected by the TLD." [279] The seven new gTLDs are managed under contracts concluded with ICANN.
186. All the new gTLDs are operational with the exception of .pro. Domain names can be registered under the six new gTLDs that are operational by approaching any ICANN-accredited registrar. [280] Each of the registrars for new gTLDs has taken measures to protect intellectual property rights, either preventively by introducing procedures whereby the owners of intellectual property rights can assert those rights before the registrations are made available to the wider public, or ex post facto by adopting the UDRP, or both. In addition, some registrars that administer domains reserved for certain categories of users, such as .biz or .name, have introduced special procedures for settling disputes that relate to the restrictions on registration, whereby third parties can contest a registration that is alleged to have been made in breach of such restrictions. These measures are explained in paragraphs 213-218 of this Chapter.
187. More than a year after the decision to introduce the seven new gTLDs, the ICANN Board of Directors resolved [281] to launch an evaluation process [282] addressing the performance of the new gTLDs and their impact on the DNS. The evaluation relates to a number of technical, business or legal issues. Provision is made for the examination of: (i) the efficacy of the various preliminary registration and other measures taken to limit the risks of violation of trademark rights in the start-up phase of new gTLDs; (ii) the greater diversification of the DNS, and its effect on the interface between domain names and intellectual property rights: (will it allow greater coexistence between trademarks and other distinctive signs in the DNS, or will it on the contrary cause an increase in problems of intellectual property rights being infringed by the registration of domain names?); (iii) the reaction of Internet users, search engines and directory services to this greater diversification of the DNS; and (iv) the design and coordination of Whois services in an extended DNS. ICANN proposes to publish its first evaluation report in 2003.
(b) Multilingual Domain Names
188. Until recently, it was only possible to register domain names in Roman script (those that make up the English alphabet) or ASCII characters. [283] However, there are developments in the Internet community to allow the registration of domain names written in other non-ASCII characters such as Arabic, Chinese, Cyrillic, Japanese or Korean.
189. In January 2000, the Internet Engineering Task Force (IETF) formed a Working Group on the Internationalization of Domain Names to "specify the requirements for internationalized access to domain names and to specify access and a standards track protocol based on the requirements." [284] Since that time, a number of commercial testbeds using various technologies have been established and began to register multilingual domain names. [285] In view of the fact that the IETF has not yet set definite standards on the subject, no multilingual domain name has yet been added to an official DNS area file, and none is yet operational.
190. The discussion of the multilingual domain names issue is ongoing in various fora, including ICANN, which set up a working group in March 2000 "to identify the various internationalization efforts and the issues they raise, to engage in dialogue with technical experts and other participants in these efforts, and to make appropriate recommendations to the Board." [286] On the recommendations of that working group [287] an Internationalized Domain Names Committee was established "to serve as a general coordination body for the work on policy issues identified in the IDN Working Group report and such other policy issues that the IDN Committee shall identify."
191. Numerous issues remain to be addressed, as it is important that the introduction of multilingual domain names to the DNS does not affect its stability. Most importantly, the IETF will conclude its process of developing standards by which non-ASCII characters may be used in DNS protocols. At the same time, procedures for the adoption of the TLDs themselves in non-ASCII characters are being considered, as well as domain name registration services that function in non-ASCII characters.
192. The final report of the Internationalized Domain Names Committee, dated June 27, 2002,[288] notes that these matters could to a large extent be settled on the basis of experience acquired in the ccTLDs, the new gTLDs and more recently through the process of re-allocating the .org domain. The Committee explains that, if the internationalization of domain names calls for necessary adaptations, a certain number of principles applicable to existing TLDs, including the adoption of a new TLD or the selection of a registrar, could be transposed to domain names in non-ASCII characters. For instance, in the same way as .info was created on the basis of the semantic link between the word-form "info" and the concept of "information," the Committee suggests that a new TLD in non-ASCII characters could also be selected on the basis of a semantic association between a particular geographical entity (such as China), or a language (such as Greek), or equally a cultural entity (such as Thai museums).
193. The internationalization of domain names was also discussed in the framework of the International Telecommunication Union (ITU) and WIPO at a symposium organized jointly in Geneva by the international organizations on December 6 and 7, 2001. [289] Each organization published a briefing paper to explain the impact of the internationalization of domain names from, respectively, the technical and intellectual property standpoints. The ITU working document, entitled "Technology and Policy Aspects," [290] deals among other things with the technological challenges to the development of internationalized domain names, such as the need to standardize the underlying technologies so that such names may be incorporated in the DNS without difficulty. It also mentions a number of policy and coordination issues raised by internationalized domain names, such as the determination of the authority with respect to each language. The effect of the internationalization of domain names on intellectual property is discussed in the WIPO briefing paper entitled "Internationalized Domain Names ? Intellectual Property Considerations." [291]
194. As noted in the final Report of the Second WIPO Internet Domain Name Process ("Second WIPO Process"), [292] the internationalization of domain names will have repercussions for intellectual property. The conflicts that ensue from the use, in a designation system such as the DNS, of the various languages and alphabets used throughout the world is well known in the trademark field. However, the internationalization of domain names may be expected to raise a number of new considerations with respect to such disputes, including: the importance of phonetic similarity in what is essentially a visual or textual communication medium, the speed and modest cost at which a domain name registration can be obtained as compared with a trademark registration, and the automatic nature of domain name registrations as opposed to the examination procedure that precedes the registration of trademarks. As described in greater detail in paragraph 220 below, the WIPO Arbitration and Mediation Center has already administered a number of disputes relating to internationalized domain names. [293]
(c) Keywords
195. The Internet keyword system makes it possible to locate websites using ordinary words, without resorting to technical prefixes such as http:// or www., or top-level suffixes such as .com, .net, .org or .info. Usually it is sufficient to type the keywords into the window of the navigation software to be led directly to the website ? and indeed, in some cases, to the Uniform Resource Locator (URL) ? that is sought. The effect of this, however, is that the keywords can themselves be regarded as virtual identifiers and consequently have intellectual property implications, as described in the context of trademark infringement in Chapter III(b) above. Keywords do not constitute an alternate routing system to the DNS, but rather form a layer super-imposed upon it. A number of companies offer keyword services, among them CommonName Ltd., [294] and Netscape. [295] There are also keywords in non-ASCII characters.
196. Some providers of keywords (in ASCII characters) currently offer dispute-resolution services to address bad faith use of trademarks involving keywords. [296] These procedures correspond to a large extent to those under the UDRP. They are only adopted voluntarily, however, as the providers are under no obligation to join the ICANN system or adopt any of its policies.
197. The use of keywords in navigation software and search engines holds some potential for relieving the growing pressure on the DNS, by providing alternatives to domain names to navigate the Internet. However, the increase in their use is likely to be accompanied by a growing risk of intellectual property violations, exacerbated by the internationalization of the DNS. It remains to be seen whether the market will adopt these keyword systems and how efficiently their dispute-resolution procedures will work.
(d) Multiple Roots
198. The structure of the DNS is traditionally based on a single central root, so as to permit reliable universal communication on the Internet. As stated by the Internet Architecture Board (IAB):
- "To remain a global network, the Internet requires the existence of a globally public name space. The DNS name space is a hierarchical name space derived from a single, globally unique root. This is a technical constraint inherent in the design of the DNS. Therefore it is not technically feasible for there to be more than one root in the public DNS. That one root must be supported by a set of coordinated root servers administered by a unique naming authority." [297]
199. A number of attempts have been made to multiply the number of roots used on the Internet. Some are either purely private and therefore totally outside the public DNS, or experimental and designed in such a way as not to have an adverse effect on its operation. Others, on the other hand, have a commercial purpose, and seek to establish top-level structures to rival that managed by ICANN. Some fear that such developments may jeopardize the stability and reliability of the DNS. Preservation of the universal character of the network is an essential concern for the Internet community, and ICANN has reaffirmed its "commitment to a single, authoritative public root for the Internet Domain Name System (DNS) and to the management of that unique root in the public interest according to policies developed through community processes." [298]
200. The adoption of multiple roots also carries a risk in terms of the protection of intellectual property rights in the DNS. That protection is derived from a contractual system based on the UDRP. It is implemented through contracts between ICANN and registrars and, in turn, contracts under which domain name applicants agree to abide by the UDRP. Because multiple roots are outside the contractual system established by ICANN, there is nothing to ensure that their operators will apply or even adopt the UDRP, and thereby protect intellectual property rights. To address this issue, some operators have opted for systems comparable to the UDRP; for instance, the company New.net [299] has introduced a Model Domain Name Dispute Resolution Policy.
(e) Creation of the Generic Top-Level Domain .EU
201. The creation of the generic top-level domain .eu was one of the objectives stated in the eEurope initiative approved by the European Council in March 2000. At the end of the public consultation process on the creation of the generic top-level domain .eu initiated by the European Commission, [300] the European Parliament and Council adopted on April 22, 2002, a Regulation on the implementation of the top-level domain .eu. [301] The Regulation sets out the conditions for the implementation of .eu (for instance the designation of a registrar) and lays down the general policy framework within which the registrar will operate.
202. A number of provisions on the operation of .eu relate to intellectual property protection. It is provided, for example, that the owners of prior rights or rights established by national and/or community law, as well as public entities, will benefit from a specific "sunrise period" during which they can register domain names corresponding to their rights. In addition, the Regulation provides for the introduction of a Whois service providing information on the owners of domain names under .eu. Such a service is essential in any domain name registration system that seeks to ensure protection for intellectual property rights. [302] Finally, it provides for implementation of a policy of alternative dispute settlement for conflicts involving .eu domain names and intellectual property rights. The European Commission also conducted an online consultation on cybersquatting, [303] so as to develop the best possible framework to prevent speculative and fraudulent registrations of domain names in the .eu domain. The .eu domain is proposed to be managed by a non-profit organization, and registration of domain names is expected to begin in 2003.
(f) ICANN Reform
203. The Internet Corporation for Assigned Names and Numbers (ICANN) is the entity responsible for coordinating certain DNS functions. [304] ICANN is a non-profit organization incorporated under the laws of the State of California in the United States of America. Its creation is the result of the United States Government's goal, since 1997, to privatize the DNS and thereby increase its competitiveness, [305] and represents the completion of a process that began with the publication in June 1998 of the White Paper of the National Telecommunications and Information Administration (NTIA) of the United States Department of Commerce, entitled "Statement of Policy on the Management of Internet Names and Addresses." [306]
204. The Department of Commerce entered into a Memorandum of Understanding [307] with ICANN under which ICANN was entrusted with the following functions: "(i) set policy for and direct allocation of IP number blocks to regional Internet number registries; (ii) oversee operation of the authoritative Internet root server system; (iii) oversee policy for determining the circumstances under which new TLDs are added to the root system; and (iv) coordinate the assignment of other Internet technical parameters as needed to maintain universal connectivity on the Internet." The Memorandum of Understanding between the Department of Commerce and ICANN, which has been amended and renewed a number of times, has recently been renewed until September 2003.
205. While ICANN's functions and authority are primarily of a technical nature, the organization's performance of these functions sometimes raises public policy issues, including a number relating to intellectual property. As ICANN is a private sector organization subject to the laws of one particular country, the question has been raised whether it can legitimately address those public policy issues without the additional involvement of public authorities, including intergovernmental organizations. Recently, ICANN has undergone a reform process [308] in an attempt to address, inter alia, this question. It seems unlikely, however, that the results of the ICANN reform will succeed in resolving this question satisfactorily and definitely. [309]
(g) World Implementation of the Enum Protocol
206. The Enum Protocol [310] is the result of work conducted by the Internet Engineering Task Force (IETF) Working Party responsible for the conversion of international public telephone numbers with a view to their use in the DNS. This Protocol, put forward by the IETF in September 2000, makes it possible to convert telephone numbers into domain names and to relate them to communication services through what is known as Uniform Resource Identifiers (URIs). [311] The best known forms of URI are the Uniform Resource Locators (URLs), which are used to locate resources on the World Wide Web.[312] Enum enables anyone to simply use a telephone number to reach any subscriber who has included his particulars (mobile telephone number, e-mail address, Internet address, text message address, etc.) in the Enum database. [313] Given that the Protocol allows telephone numbers to be converted into domain names, it has been suggested that those domain names should be registered under the top level domain .arpa, originally introduced during the initial development of the DNS and managed by the Internet Architecture Board (IAB). [314]
207. The implementation of the Enum Protocol is under consideration by the International Telecommunication Union (ITU). [315] Its potential implementation raises concerns, particularly of a regulatory and political nature. It is suggested that the management of numbering resources in the DNS be considered a matter of national competence, for each ITU Member State to which the country code is given (for example, in France, which has telephone numbers predicated by the 33 country code). It is proposed that ITU retain administrative control over the Enum database. A number of questions remain as to its implementation: What body should one approach to have data published? Will there be registration services and registries? And if so, how will they be selected? Will they be public bodies, designated by States? Will implementation of the Protocol be possible only in ITU Member States? Will there be a coordinating body? These questions need to be addressed before it is decided whether, and if so to what extent, the global introduction of the Enum Protocol is likely to affect the DNS.
(iii) WIPO PROGRAMS
208. WIPO's activities in connection with domain names have intensified in recent years, and concentrate on three areas: (i) the domain name dispute resolution services of the WIPO Arbitration and Mediation Center; (ii) the Second WIPO Internet Domain Name Process; and (iii) the WIPO Cooperation Program for ccTLD Administrators.
(a) WIPO Arbitration and Mediation Center
209. The WIPO Arbitration and Mediation Center (the WIPO Center) is an institution based in Geneva (Switzerland) to provide Alternative Dispute Resolution (ADR) services. It was established in 1994 to offer arbitration and mediation services for the resolution of international commercial disputes between private parties. More recently, in addition to the traditional disputes, it has concentrated on the administration of Internet domain name disputes.
(i) Resolution of Disputes in the Generic Top-Level Domains (gTLDs): .com, .org and .net
210. Following the adoption on August 24, 1999, of the Uniform Domain Name Dispute Resolution Policy (UDRP), ICANN has accredited a number of institutions to administer complaints filed under the Policy, [316] among which the WIPO Center is today the leading provider.
211. The procedure laid down in the UDRP allows a complainant to request the transfer or cancellation of a domain name on the grounds that: (i) it is identical or confusingly similar to a trademark in which he or she holds rights; (ii) the owner of the domain name has no rights or legitimate interests in it; and (iii) the domain name has been registered and is being used in bad faith. The UDRP is a mandatory procedure that applies to every domain name by virtue of a clause in the domain name registration contract. The registrars accredited by ICANN to register domain names in the gTLDs are obliged to abide by the decisions rendered under the UDRP.
212. To date, 4,254 complaints have been brought before the WIPO Center, including about 85% in the .com domain, 18% in .net and 10% in .org [317]. Some 90% of these cases are settled within an average period of 50 days and at a cost of US$1,500 each. [318] Most complainants make use of the model complaint made available by the WIPO Center on its site. [319] The parties to these disputes originate from 105 countries. The cases are decided by independent intellectual property and Internet specialists on the WIPO list of panelists, [320] which today comprises over 300 experts from some 50 countries in many regions of the world.
(ii) Resolution of Disputes Concerning the New gTLDs
213. The UDRP also applies to the resolution of intellectual property disputes that arise in the new generic top-level domains (gTLDs), .aero, .biz, .coop, .info, .museum, .name and .pro. The WIPO Center has itself administered 84 UDRP complaints concerning the .info domain and 38 concerning the .biz domain. In addition, most registrars have implemented dispute-settlement procedures specifically suited to conflicts arising in the initial registration phase, or are in the process of doing so. The purpose of these procedures is to provide trademark owners with additional means to ensure the protection of their rights at the introduction of the new domains. [321] The WIPO Center has been designated by the registry operators of certain new gTLDs to administer their disputes in accordance with their specific procedures, as described below.
214. .info dispute resolution policy. The .info domain implemented a Sunrise Registration Period (from July 25 to August 31, 2001), during which only trademark owners could register a domain name that was identical to the textual elements of their trademark, provided the trademark registration had national effect and was issued prior to October 2, 2000. That period was followed by a Sunrise Challenge Period (from August 28 to December 26, 2001), during which such sunrise registrations could be challenged under a Sunrise Challenge Policy (SCP), [322] exclusively administered by the WIPO Center. The Policy enabled any third party to apply for the cancellation or transfer of a domain name that had been registered in violation of the conditions of .info sunrise registration. The WIPO Center received 1,579 challenges to .info registered domain names under the SCP, all of which have been resolved. The SCP intellectual property protection measure had one serious shortcoming, however, in the absence of any verification of intellectual property rights upon application for domain name registration. This allowed speculators to register .info names, by providing false trademark registration information. As a result, the operator of the .info registry, Afilias, decided to file SCP challenges to any sunrise registrations not independently challenged, in order to clear its database of potentially improper sunrise registrations. The WIPO Center resolved 13,592 of such "challenges of last-resort," since December 26, 2001, completing this procedure in mid 2002. The .info domain has been open to the general public for registrations since September 12, 2001, and the UDRP applies to all such registrations.
215. .biz dispute resolution policy. The .biz domain implemented a period (from May 21 to August 6, 2001), during which trademark owners could file one or more "intellectual property claims" relating to an alphanumeric string, or name, identical to their marks, thereby enabling the registry to advise them if the same string was registered as a domain name during the start-up period. Upon notification by the .biz registry, trademark owners who had filed such a claim were given the opportunity to commence opposition proceedings under the Start-Up Trademark Opposition Policy (STOP) with any accredited dispute resolution service provider, requesting the transfer of the contested domain name. [323] To date, the WIPO Center has received 338 oppositions under the Policy, of which 334 have been resolved. The .biz domain has been open to the general public for registrations since June 25, 2001 and, as above, the UDRP applies to all such registrations.
216. .name dispute resolution policy. The .name domain devised yet another mechanism to handle abusive registration practices in the initial stages of its operation. [324] This mechanism enabled trademark owners to apply for a defensive registration in the preliminary phase (from August 15 to December 14, 2001), by reserving a given alphanumeric string or name in order to prevent the registration of domain names that included the string at the second or third, or both, levels. The registry also offers trademark owners a NameWatch service that advises them of any .name registration that matches their trademarked name.
217. .pro dispute resolution policy. The .pro registry is not yet operational, but proposes to implement a "sunrise period" during which owners of trademarks registered prior to December 31, 2001, can register a name that corresponds to their mark, provided they meet the registration eligibility restrictions for .pro. During the "sunrise challenge period" any person will be able to submit a challenge against a sunrise domain name for non-compliance with these registration conditions. As above, when registrations open to the general public, the UDRP will apply to all .pro domain name registrations.
218. In addition, the registries that administer domains restricted to certain categories of users, such as .biz, .name, .coop, .museum and .aero, have established special dispute resolution procedures that relate to registrants' eligibility for registration. The WIPO Center has been designated to handle complaints filed in relation to these special procedures. The .biz domain, for example, which is intended solely for names used or intended to be used for "bona fide business or commercial purposes," has introduced a procedure to resolve disputes between domain name holders and third parties who allege that the domain name at issue has been registered in violation of the .biz registration restrictions. [325] This procedure operates parallel to any UDRP proceedings. In the .name domain, which is reserved for the registration of names of persons or fictional characters, registrations are subject to an Eligibility Requirements Dispute Resolution Policy (ERDRP). The WIPO Center received its first case under this Policy on May 8, 2002. In the domains .coop, .museum and .aero, the Charter Eligibility Dispute Resolution Policy (CEDRP) applies, [326] and enables any third party to request the cancellation of a registration allegedly made in violation of the applicable registration conditions.
(iii) Resolution of Disputes in ccTLDs
219. To date, 28 ccTLD administrators have designated the WIPO Center for the resolution of domain name disputes arising in their domains as follows: .AC (Ascension Island), .AE (United Arab Emirates), .AG (Antigua and Barbuda), .AS (American Samoa), .AU (Australia), .BS (Bahamas), .BZ (Belize), .CC (Cocos Islands), .CY (Cyprus), .EC (Ecuador), .FJ (Fiji), .GT (Guatemala), .LA (Lao People's Democratic Republic), .MD (Republic of Moldova), .MX (Mexico), .NA (Namibia), .NU (Niue), .PA (Panama), .PH (Philippines), .PN (Pitcairn Island), .RO (Romania), .SC (Seychelles), .SH (Saint Helena), .TT (Trinidad and Tobago), .TV (Tuvalu), .UG (Uganda), .VE (Venezuela) and .WS (Western Samoa). Most of these ccTLDs have adopted the UDRP or a variant of it. Of the 94 ccTLD domain name disputes that have been submitted to the WIPO Center to date, 88 have been resolved. [327]
(iv) Resolution of Disputes Concerning Internationalized Domain Names
220. Although the internationalization of domain names is not yet fully operational in the DNS, the preliminary registration phases and the testbeds of the various providers of internationalized domain name registration services have already given rise to a number of disputes. The UDRP applies to disputes concerning internationalized domain names registered with ICANN-accredited gTLD registrars. The WIPO Center has to date received 32 complaints that relate to registrations of internationalized domain names registered through the VeriSign GRS testbed, and 30 of those cases have been resolved. [328] The internationalized domain name cases submitted to the WIPO Center relate to names in Chinese script (e.g., D2000-0915 < ????????.com>), Japanese script (e.g., D2000-1791 <??.com>), Korean script (e.g., D2001-1155 < ????.com>), or characters peculiar to Norwegian (æ), German (ö), French (é) and Swedish (å).
(v) Resolution of Keyword Disputes
221. The WIPO Center has also been designated to resolve disputes concerning Internet keywords. [329]
(vi) Online Search Index of Decisions Handed Down Under the UDRP
222. The Center has launched an online search index comprising more than 2,500 WIPO domain name case decisions under the UDRP. The index, which is regularly updated, affords access to all legal or other information contained in decisions handed down in the UDRP context, and is available on the WIPO site, at http://www.arbiter.wipo.int/domains/search/
(b) Second WIPO Internet Domain Name Process
223. While the first WIPO Internet Domain Name Process focused on the protection of trademarks and service marks in the DNS, it became apparent that designations other than trademarks were also subject to abuse in the DNS. The Report issued at the conclusion of the first WIPO Process made particular note of abusive practices with respect to trade names, geographical indications and the names of persons in that connection. [330]
224. On June 28, 2000, WIPO received a request from 19 of its Member States, [331] subsequently ratified by the WIPO General Assembly, [332] to undertake a second consultation process to address the intellectual property issues relating to domain names that were outside the scope of the first WIPO Process. In response, in July 2000, WIPO initiated the Second WIPO Internet Domain Name Process. This Process addressed the bad faith, abusive, misleading or unfair registration as domain names of the following identifiers:
- International Non-proprietary Names (INNs) for pharmaceutical substances;
- names of intergovernmental organizations;
- personal names;
- trade names; and
- geographical indications, geographical names and indications of source.
225. The final Report of the Second WIPO Process, entitled "The Recognition of Rights and the Use of Names in the Internet Domain Name System," was published on September 3, 2001, [333] and submitted to the Member States of WIPO at the General Assembly held from September 24 to October 3, 2001, and also to the Board of ICANN.
226. At the 2001 General Assembly, WIPO's Member States resolved to subject the Report to comprehensive analysis by the WIPO Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications (SCT), which would convene in two special sessions for this purpose. The Standing Committee was established in March 1998 to facilitate the international development of the law of trademarks, industrial designs and geographical indications, and is composed of WIPO Member States and also, as observers, non-Member States, and intergovernmental organizations. The SCT met in special session from November 29 to December 4, 2001, and from May 21 to 24, 2002, in order to analyze the Report on the Second WIPO Process. The SCT formulated a number of recommendations [334] on which WIPO Member States took a decision at their General Assembly from September 23 to October 1, 2002. The questions addressed in the Report of the Second WIPO Process, the recommendations of the special sessions of the SCT and the decision of WIPO General Assembly are discussed below.
227. International Nonproprietary Names (INNs) for pharmaceutical substances. [335] The INN system is a naming system introduced in accordance with a resolution of the World Health Organization (WHO), in order to allocate a generic name to all approved new pharmaceutical substances. That generic name cannot be subject to any exclusive rights and is freely available for use by all. In the INN system, health authorities, intellectual property offices and the private sector have agreed that the names involved cannot be registered or used as trademarks. In the DNS, however, INNs are not protected against appropriation by private parties, and their registration as domain names creates a situation that appears to be incompatible with the underlying principles of the INN system. At the special sessions of the SCT, numerous States and entities, in particular the World Health Organization (WHO), declared themselves in favor of protection of INNs from registration by private entities in the DNS. However it was also argued that the scale of improper registration of INNs as domain names, and the lack of evidence of adverse effects of that practice, did not warrant the introduction of protection measures. The participants decided that no particular form of INN protection would be recommended in the DNS at the present stage, but that WIPO together with WHO would continue to monitor the situation and that, where necessary, it would bring any important developments in this area to the notice of Member States. At its meeting from September 23 to October 1, 2002, the General Assembly of WIPO approved this recommendation.
228. Names and acronyms of intergovernmental organizations. [336] The names and acronyms of intergovernmental organizations are protected by Article 6 ter of the Paris Convention and by the TRIPS Agreement, as well as by the provisions of other international treaties that afford protection to certain names of intergovernmental organizations or names used at the international level: such as the 1949 Geneva Conventions which prohibit the use of the name "Red Cross." [337] Article 6 ter of the Paris Convention does not confer automatic protection on the names and acronyms of intergovernmental organizations, but requires each organization to notify WIPO of the names for which it seeks protection, and WIPO then communicates these to the Member States. The protection provided by the Paris Convention extends to any registration or use of the name or acronym of an intergovernmental organization as a trademark, while it is understood that a Member State can impose a condition that the registration or use should only be restricted if it is liable to mislead the public or create a false association between the trademark in question and the name or acronym of the organization.
229. In light of the fact that international law provides intergovernmental organizations with immunity from national jurisdiction, the provisions of Article 6 ter of the Paris Convention are applied principally through the national industrial property offices, to which notifications under Article 6 ter are sent and which then ensure that the protected names and acronyms are not registered or improperly used as trademarks. At the SCT special sessions, the legal advisers of the United Nations system, representing more than 20 United Nations bodies and programs and a number of other intergovernmental organizations, spoke on the adverse implications, for both users and organizations, of the registration of names and acronyms of intergovernmental organizations as domain names. The meeting recommended that the UDRP be amended to allow complaints to be filed by international organizations under certain circumstances, while taking into account the privileges and immunities of intergovernmental organizations under international law. At its meeting from September 23 to October 1, 2002, the General Assembly of WIPO adopted the recommendation of the SCT with respect to the names and acronyms of intergovernmental organizations and instructed the WIPO secretariat to transmit the said recommendation to the Internet Corporation for Assigned Names and Numbers (ICANN). [338]
230. Personal names. [339] Cases decided under the UDRP demonstrate that the protection it confers to trademarks and service marks has been broadly interpreted as applying not only to registered marks, but also to unregistered and "common law" marks. As a result, numerous persons have filed complaints under the UDRP against the improper registration of their personal names as domain names. There are, however, two limitations on the application of the UDRP to personal names. The first limitation relates to the fact that certain countries do not recognize rights in common law or unregistered marks. In those countries, the UDRP can only be invoked to protect the names of persons against improper registration as domain names where the notoriety or commercial reputation of the persons in question extends to another country in which such marks are recognized and granted trademark protection. The second limitation relates to the fact that names of persons are protected only in so far as they are used in business, based on the fundamental principle of trademark law. The UDRP thus does not afford protection to personal names that enjoy notoriety independently of their use in commerce; for example, the names of political or historical figures. Some participants in the SCT special sessions, especially those representing countries that do not recognize unregistered marks, considered that the protection of personal names in the DNS related to the question of the extension of the UDRP to trade names. However, the meeting recommended that no action be taken in this area. At its meeting from September 23 to October 1, 2002, the General Assembly of WIPO adopted this recommendation.
231. Geographical indications, geographical names or indications of source. [340] Geographical indications are protected by certain provisions in international treaties, in particular the Paris Convention and the TRIPS Agreement. [341] Nevertheless, in the absence of an international framework for the recognition of geographical indications, and the fact that the applicable laws at present relate to trade and goods, whereas domain name registrations are wider in scope, it is problematic to amend the UDRP to cover the improper use of geographical indications as domain names. Following the discussions of the SCT special sessions, it was recommended that the General Assembly of WIPO should entrust the SCT with determining the best means of addressing the question of the protection of geographical indications in the DNS. At its meeting from September 23 to October 1, 2002, the General Assembly of WIPO adopted the recommendation of the SCT with respect to geographical indications, it being understood that the SCT is to continue the discussions on this topic.
232. With respect to the protection of country names, it was generally accepted that there currently exists no standard for the legal protection of such names at the international level. It was evident that many country names have been registered as domain names by persons or entities having their residence or registered office outside the country in question, and that in most cases the registrant was an individual or entity with no link to the government of the country concerned. [342] Most participants at the special sessions favored some form of protection for country names against registration by persons who had no connection with the constitutional authorities of the countries themselves, and some proposals were made as to the manner in which such protection could be provided. At its meeting from September 23 to October 1, 2002, the General Assembly of WIPO noted that all Delegations supported the recommendation of the SCT with respect to country names, except those of Australia, Canada and the United States of America. It noted, however, that a number of issues regarding the modalities of protection of country names in the DNS warrant further discussion. [343] The General Assembly decided that these discussions should be continued in the SCT with a view to reaching a final position.
233. Trade names. [344] Trade names enjoy protection at the international level by virtue of Articles 8, 9 and 10 of the Paris Convention. The extension of the UDRP to trade names has proven difficult for a number of reasons in particular: the diversity of national mechanisms of trade name protection, the lack of evidence of abusive registration of trade names as domain names, the fact that multiple owners of a trade name may have a legitimate interest in a single name (as the existence of a trade name is relatively easy to prove in many countries), and the fact that the main users of trade names, namely smaller businesses operating at the local level, are liable to have difficulty in qualifying for protection at a global level under the UDRP. Participants in the special sessions recommended that Member States should keep the matter under review and raise it for further discussion if the situation so demanded. At its meeting from September 23 to October 1, 2002, the General Assembly of WIPO adopted this recommendation.
(c) WIPO Cooperation Program for ccTLDs
234. Concurrently with their request that the Organization undertake the Second WIPO Internet Domain Name Process, the 19 Member States concerned requested the launch of a program for the benefit of the administrators of ccTLDs. [345] The request was duly ratified by the General Assembly of WIPO, [346] and the program commenced in August 2000. The goal was to improve the protection of the intellectual property in ccTLDs in a collaborative exercise with their administrators.
235. Under the program, WIPO: (i) developed the ccTLD Best Practices for the Prevention and Resolution of Intellectual Property Disputes; (ii) regularly advises ccTLD administrators upon request on intellectual property issues and the design of suitable procedures for the settlement of disputes, and provides the services of the WIPO Arbitration and Mediation Center; (iii) advises ccTLD administrators who have initiated national consultation processes along the lines of the WIPO Internet Domain Name Processes; and (iv) published a ccTLD database and a trademark database portal.
236. The ccTLD Best Practices for the Prevention and Resolution of Intellectual Property Disputes were presented in draft form at the conclusion of the WIPO Conference on Intellectual Property Questions Relating to the ccTLDs, organized on February 20, 2001. [347] The draft was published online for public comment, [348] and the final version was published on June 20, 2001. [349] The Best Practices provide a guide on intellectual property issues for use by ccTLD administrators. They emphasize the importance of domain name registration practices designed to prevent conflict between domain names and intellectual property rights, ADR procedures and, finally, describe the dispute resolution services of the WIPO Arbitration and Mediation Center, which are available to any ccTLD administrator who may have designated the Center for this purpose. Since the launch of the WIPO ccTLD program, WIPO has provided advice on the management of intellectual property issues to 50 ccTLD administrators, and 28 ccTLDs have retained the WIPO Center as their dispute-resolution service provider.
237. In addition, WIPO collaborates closely with certain ccTLDs in the course of their national consultations, which are the national equivalent of the WIPO Internet Domain Name Processes. The administrators of the domains .nl (Netherlands) and .ie (Ireland), have embarked on such processes with a view to developing dispute-resolution procedures for disputes arising in their domains. The administrators of the .nl and .ie domains have requested WIPO's participation in their national processes, in so far as they relate to intellectual property concerns. The consultation process concerning .nl was completed in November 2001 with the publication of a report that recommended the adoption of an arbitral procedure for the resolution of domain name disputes, based on alleged infringements of trademarks and trade names. [350] Following a public tender, the .nl administrators designated the WIPO Arbitration and Mediation Center to administer disputes under the new .nl dispute-resolution procedure, due to come into effect early 2003. The national consultation process in .ie is ongoing, with WIPO's involvement.
238. WIPO also published a ccTLD database in January 2002. [351] This database, which is regularly updated, has links to the websites of almost all of the 243 ccTLDs, and provides information on each ccTLD as to whether the administrator has implemented a registration contract, a Whois service, or alternative dispute-resolution mechanism. Analysis of the data shows that, of the 243 ccTLDs included in the database, 114 (or 46.9%) have introduced a registration contract, 119 (or 48.9%) provide a Whois service, and 56 (or 23%) have adopted a dispute-resolution mechanism. It also reveals that 49 ccTLDs (almost 20.1%), are not visible on the Web, with their sites being either non-existent or inaccessible.
239. WIPO has also published a trademark database portal to facilitate preliminary trademark searches for persons wishing to register a domain name in a gTLD or ccTLD and satisfy themselves that the name does not infringe third-party trademark rights. [352] At present, the portal is screening the trademark databases compiled by 56 national, regional and international industrial property offices or agencies.
III. (d) PATENTS
240. This Chapter describes the patent system, as it has adapted to the evolution of digital technologies, focusing on issues that have arisen with respect to: the scope of patentable subject matter, including business method patents and software protection; prior art effect; and enforcement of patent rights. It then examines WIPO's response and related programs in the field of patent law.
(i) PATENTS IN THE DIGITAL ENVIRONMENT
241. Inventions are characteristically protected by patents. Virtually every country that accords legal protection to inventions ? and there are more than 160 such countries ? grants such protection through the patent system. In addition, inventions may also be protected by other types of rights, such as utility models or trade secrets. The protection of inventions through patents is recognized, in particular, in two multilateral treaties, the Paris Convention and the TRIPS Agreement. The patent system provides a framework for innovation and technological development by, on the one hand, granting an exclusive right to the owner of a patent to prevent others from commercially exploiting the patented invention for a limited period [353] and, on the other hand, balancing this right with a corresponding duty to disclose the information concerning the patented invention to the public. This information, which is classified and stored in the patent documentation, is available to anyone and, increasingly, is accessible online through Internet-based systems. [354] The mandatory disclosure of the invention thus enriches the available pool of technological knowledge, facilitates technology transfer, and enhances the opportunities for creativity and innovation by others. [355]
242. The patent system has played a vital role in promoting the development of the underlying technical infrastructure for the Internet and e-commerce that takes place across its networks. E-commerce relies in a critical way on various computer and network technologies, both hardware and software. The market exclusivity established through effective patent protection has provided a reward for investment and has justified the expenditures on research and development to achieve further technological progress. However, the new technologies pose challenges to the conventional legal scheme for the patent system. The following addresses several of the current issues associated with digital media and e-commerce in the context of patent protection.
(a) Business Method Patents
243. In order to be eligible for patent protection, an invention must fall within the scope of patentable subject matter. Article 27.1 of the TRIPS Agreement provides that, subject to certain exceptions and conditions under that Agreement, patents shall be available "for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application." While it is possible to provide limited exceptions, which are allowed under the TRIPS Agreement, under national and regional laws, the general rule is that patent protection for an invention will not be refused simply because it falls in a particular field of technology.
244. Patents have recently been granted to certain inventions concerning financial services, electronic sales and advertising methods and business methods, including business methods consisting of processes to be performed on the Internet, and telephone exchange and billing methods. [356] A significant decision in the United States of America, for example, found a business model for managing an investment portfolio to be patentable subject matter, in State Street Bank & Trust v. Signature Financial Group. [357] In Europe, the Boards of Appeal of the European Patent Office (EPO), in the SOHEI case, [358] has decided that a computer system involving a number of independent management tasks, including financial and inventory management and a system operation method was patentable as such. The case required the EPO Boards of Appeal to decide whether the addition of finance-related expressions for data would classify the apparatus and method as principally performing a "method of doing business as such". [359] It is expected that the number of these e-commerce-type patents may increase significantly, bearing in mind its potential for individuals, companies and national economies, as well as the global economy. Such patents are viewed by some as important for creating incentives and spurring investment in new digital technologies.
245. On the other hand, this trend has been criticized by those who stress that a number of such patents concerning business practices and methods reflect familiar ways of doing business that are not new or novel - the only aspect that is different is that they occur in cyberspace. In Europe there is the view that the subject matter of a patentable "invention" must have a "technical character" or involve "technical teaching," i.e., an instruction addressed to a person skilled in the art as to how to solve a particular technical problem using particular technical means. [360] In Japan, a business method itself which is a man-made arrangement, or a method using only such an arrangement, is not patentable subject matter. [361] In the United States of America, issues were raised as to "patent quality" due to the granting of some business method patents for inventions that did not meet the requirements of novelty and non-obviousness. In response, the United States Patent and Trademark Office (USPTO) issued a "White Paper on Automated Financial or Management Data Processing Methods (Business Methods)," [362] and has taken a number of measures. [363] In addition, the Japan Patent Office (JPO), the EPO and the USPTO conducted a trilateral comparative study on computer implemented business methods, that was designed to facilitate consistent search and examination practices across the offices, in light of ever-increasing numbers of filings related to business method inventions. The Trilateral Report produced the following consensus summary: [364]
- "A technical aspect is necessary for a computer-implemented business method to be eligible for patenting. (In the United States of America, the "in the technological arts" feature may be implicitly recited in the claim. The EPO and the JPO require that the technical aspect be expressed in the claim.)
- To merely automate a known human transaction process using well known automation techniques is not patentable."
246. Because the phenomena of digital networks and e-commerce are so new and still emerging, some claim that gauging the novelty of a business model in this area and whether it meets the requirements of patentability is a tenuous task. It is also contended that competition may be harmed in the digital market place if companies are able to obtain patents for basic business methods that already exist in non-cyberspace. On the other hand, other commentators argue that patent protection is merited given the technological innovation reflected in such new business models and that this protection is needed in order to provide incentives for further investment in new on-line businesses. A lawsuit filed in October 1999, in which Amazon.com, the Internet bookseller, sued its rival, Barnesandnoble.com, illustrates the stakes involved. Amazon.com, in September 1997, started using a "one-click" technology to enable its online customers to make repeated purchases from its website without having to repeatedly fill out credit card and billing address information. It received a patent for its one-click technology in September 1999 (United States Patent No. 5,960,411), and alleged that Barnesandnoble.com's one-click checkout system, known as "Express Lane," infringed its patent. The decision of the District Court awarding preliminary injunctive relief to Amazon was taken on appeal to the Court of Appeals for the Federal Circuit. In March 2002, the case was settled between the two parties. [365]
(b) Software Patents
247. A similar discussion concerning patentable subject matter has occurred in respect of software patents, as the significance of software itself extends well beyond the software industry. As mentioned above, the TRIPS Agreement (Article 27.1) does not allow the exclusion of software in general from patentability. [366] In addition to the question as to whether computer programs as such should be regarded as "inventions" under the patent law, this broad scope of patentability has prompted a discussion on the subject of where to draw the line between copyright and patent law protection for computer programs. A Fédération Internationale des Conseils en Propriété Industrielle (FICPI) review of international patent protection of software, e-commerce and business methods, [367] for example, found that generally countries in Europe as well as South Africa explicitly exclude computer programs as such from protection under their patent laws, while Australia, Canada, Chile, Israel, Japan, [368] the Republic of Korea and the United States of America do not exclude such protection. The same countries, with the exclusion of Chile, also do not exclude granting patent protection to business method as such. Although some patent offices have established examination guidelines for computer related inventions, including software related inventions, very little international harmonization has been achieved in this area. [369]
248. In the field of information technology, the value of intellectual assets often resides in the "content" of the information. In the past, software has often been sold as an integral part of the computer system, while, today, software products are often marketed in the form of computer readable media, for example, diskettes and CD-ROMs or directly over the Internet. Software-related inventions are thus stored in such media, and commercialized separately from the computer hardware. It is necessary, therefore, to claim such software-related inventions as a computer readable medium storing the software that performs the claimed functions. This type of claim is commonly called "Beauregard-type claim." [370] Other types of claims, such as "Lowry-type claim" (a computer readable medium storing a data structure, which data structure is interrelated to the medium structurally and functionally) [371] or a "propagated signal claim" (a claim to a computer data signal that is embodied in a carrier wave) [372] have also been advanced by practitioners. As this topic is relatively new, there is not as yet international harmonization concerning an acceptable claim format with respect to software-related inventions.
249. In Europe, the European Commission issued a proposal for a Directive on the protection by patents of computer-implemented inventions in February 2002. [373] While inventions using software can already be patented through the European Patent Office (EPO), or national patent offices, implementation of the conditions for patentability vary, and so the Directive is designed to harmonize the way in which national patent laws deal with software inventions. In particular, the proposal provides that, in order to meet the requirement of inventive step, as is the case with inventions in general, a computer-implemented invention must make a technical contribution to the state of the art. European cases in which a "technical contribution" has been found include an invention to increase computer processing speeds, and an invention by which an X-ray machine was controlled by a data processing unit. Further, the proposal does not follow the practice of the EPO in permitting claims to computer program products either on their own or on a carrier, as this could be seen as allowing patents for computer programs "as such". [374]
(c) Prior Art Effect
250. As noted, patents are granted only to inventions that are novel, involve an inventive step and are useful or industrially applicable. To determine if the requirements of novelty and inventive step are met, the claimed invention is compared with the existing state of the art. The existing state of the art is sometimes referred to as the "prior art." Prior art in electronic form, which exists in cyberspace only ("cyber art"), raises questions as to its availability as "prior art" and, thus, whether it can be applied against an invention for which a patent is sought in determining novelty or inventive step. The questions include whether that kind of information has become "prior art" even if it was disclosed on the Internet for only a limited period.
251. Although similar questions have been addressed with respect to prior art published on paper, publication on the Internet may have different implications. Authenticity, veracity and integrity are the critical issues for prior art in cyberspace, since cyber art is considered to be more vulnerable to alteration and modification. The determination of the timing of the disclosure and the accessibility of the cyber art to the public, given the network's capacity for instantaneous dissemination on the international scale, are other concerns. Furthermore, national laws may extend the concept of the prior art to include prior uses. Under such national laws, the concept of "use" may be revisited in a computer environment. In addition, the above-mentioned questions are applicable in the context of a grace period for public disclosure of an invention before filing a patent application. [375] WIPO conducted a survey of its Member States concerning, among other issues, disclosure of information on the Internet, focusing on current national approaches and the need for harmonization at an international level, and the summary of its results is available online. [376]
(d) Enforcement of Rights
252. As in other fields of intellectual property, jurisdictional questions and enforcement of rights are also relevant to patent protection. The Internet raises complex issues in this regard, as patent protection is provided on a country-by-country basis, and the patent law of each country has application only within its borders, in accordance with the traditional principles of territoriality. For example, where patented software is sold and delivered over the Internet internationally, any infringement action would require a consideration of the jurisdictional and choice of law issues. Private international law issues in the field of patents are discussed in Chapter IV below. Moreover, the first practical issue may be that of detection, since the unauthorized importation of such software by means of the Internet, unlike the importation of tangible goods, cannot be detected and stopped by customs authorities.
253. One of the questions particular to patent protection may be the case where a patented product invention consists of elements that are physically located in different territories. Or, for example, in the case of process patents for a method to process and transfer certain data using computerized networks (for example, the Internet), distinct elements in the claimed process could be performed in different territories. If an alleged infringer operates a system containing all of the claimed elements within the territory in which the invention is protected, there would be a straightforward claim for infringement. However, the questions of infringement and jurisdiction would be more difficult where a patented invention involves activities in several countries by several individuals. In particular, Article 28 of the TRIPS Agreement requires that a patent confer on its owner the right to prevent others from "using" the patented product or process. What constitutes "using" a patented product or process is increasingly complicated in the case of Internet-related e-commerce patents.
254. This question may be examined in the context of the abovementioned case, State Street Bank & Trust v. Signature Financial Group [377], where the Court of Appeals held that the patent involved patentable subject matter. The patent Claim 1 in that case provides as follows:
"A data processing system for managing a financial services configuration of a portfolio established as a partnership, each partner being one of a plurality of funds, comprising:
- computer processor means for processing data;
- storage means for storing data on a storage medium;
(i) means for initializing the storage medium;
(ii) second means for processing data regarding assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds, assets and for allocating the percentage share that each fund holds in the portfolio;
(iii) means for processing data regarding daily incremental income, expenses, and net realized gain or loss for the portfolio and for allocating such data among each fund;
(iv) means for processing data regarding daily net unrealized gain or loss for the portfolio and for allocating such data among each fund; and
(v) means for processing data regarding aggregate year-end income, expenses, and capital gain or loss for the portfolio and each of the funds."
Each of the recited "means" in Claim 1 of the patent corresponds to a physical structure that could be located at sites remote from the other "means." Indeed, the various "means" could be located in different countries. Given this situation, it may not be clear in which jurisdiction the accused infringer is actually "using" the patented invention. Although such questions remain largely hypothetical for the moment, real cases can be anticipated to follow. Thus, increasing consideration must be given to these questions in future to ensure that rightsholders and tribunals are well prepared.
(ii) WIPO PROGRAMS
255. WIPO has been addressing a number of issues in this area . Firstly, the Standing Committee on the Law of Patents (SCP) studied the desirability and feasibility of harmonizing rules concerning the patent law implications of the disclosure of technical information on the Internet, such as its impact on patentability. [378] The discussion revealed that most of the countries recognize the prior art effect of information disclosed on the Internet under the general rules and practices applicable to the determination of prior art. [379] Without any international harmonization with respect to the definition of prior art, it is apparent that the practices concerning the determination of the contents and timing of disclosures on the Internet vary from one Office to the other. Against this backdrop, the SCP agreed that in the first instance, it was necessary to establish general principles concerning prior art that would also cover the disclosure of information on the Internet under the Substantive Patent Law Treaty (SPLT). The Committee would, at a later stage, consider the need to establish special provisions specific to Internet disclosures in the Practice Guidelines under the SPLT. [380]
256. Secondly, the Patent Law Treaty (PLT) and the accompanying Regulations, which were adopted in June 2000, contain provisions for harmonization of the formal requirements concerning patent applications and patents which are applied by the industrial property offices of States and regional industrial property organizations. [381] In relation to new methods for electronic administration, Article 8 and Rules 8 and 9 of the PLT and its Regulations, in particular, provide general rules relating to the filing of communications in electronic form or by electronic means using digital signatures, incorporating the requirements with respect to electronic filing under the Patent Cooperation Treaty (PCT). [382]
257. Thirdly, following the adoption of the PLT, the SCP initiated work on harmonization of substantive patent law in November 2000, namely, negotiations of the draft SPLT. The draft SPLT focuses, in principle, on issues of relevance for the grant of patents and validity of patents, such as the definitions of prior art, novelty, inventive step/non-obviousness and industrial applicability/utility, the drafting and interpretation of claims, the requirement of sufficient disclosure and patentable subject matter. [383] Although still at an early stage of the negotiation, the SCP expressed its will to achieve deep harmonization, i.e., harmonization of legislation as well as of practices regarding the core issues of patentability and validity of patents.
[65] The Paris Act of the Berne Convention for the Protection of Literary and Artistic Works (1971).
[66] For a discussion of digital distribution of films online, see presentation of A. Khanna, Chairman, Reliance Entertainment, Ltd., and presentation of T. Dow, Vice President and Counsel, Technology and New Media, Motion Picture Association of America (MPAA), Second WIPO International Conference on Electronic Commerce and Intellectual Property ("Second WIPO E-commerce Conference", September 2001), at http://ecommerce.wipo.int/meetings/2001/conference/program/index.html. See also presentations of G. Whitson, Senior VP, Business and Legal Affairs, Warner Bros. Online, and L. Safir, Chairman, AFMA Europe, WIPO International Conference on Electronic Commerce and Intellectual Property (" First WIPO E-commerce Conference", September 1999) .
[67] For a discussion of online publishing of literary works, see presentation of H. Spruijt, Member, Executive Committee, International Publishers Association, and J. Bourgois, Chief Executive Officer, Vuibert Publishers, Second WIPO E-Commerce Conference (September 2001) . For a discussion of the current state of online delivery of music, see presentation by J. Vacher and presentation of A. Vänttinen, New Media Adviser, International Federation of Musicians (FIM), Founder, Musicfinland.com, and presentation of S. Perlmutter, at the Second WIPO E-Commerce Conference (September 2001).
[68] See "It's the World's Biggest Copy Machine," PC Week (January 27, 1997).
[69] Indeed, in the earliest discussions concerning the Internet and its implications for copyright, some commentators argued that content subject to such rights could not be controlled on the Internet, and authors would have to find new ways to make money in cyberspace. See L. Lessig, "The Law of the Horse: What Cyberlaw Might Teach," Harvard Law Review (1999); C. Mann, "Who Will Own Your Next Good Idea,", The Atlantic Monthly (September 1998); see also "Digital Rights and Wrongs," Economist, p.95 (July 17, 1999). As the WIPO Internet Treaties of 1996 demonstrate, however, copyright continues to play an essential role in this new environment.
[70] Even without the effects that can result from copyright infringement, these markets will face considerable pressures generated by new business models and disintermediation in the networked environment. See " The Economic and Social Impacts of Electronic Commerce: Preliminary Findings and Research Agenda," OECD, at Ch.4 (1999) (in particular, the OECD highlights the effects of disintermediation).
[71] See IIPA Report by Stephen Siwek, Economists Incorporated, " Copyright Industries in the U.S. Economy: The 2002 Report". See Tamara Conniff and Craig Linder, "U.S. Intellectual Prosperity," Hollywood Reporter, p.1 (April 23-29, 2002).
[72] See further the " Study on the Economic Importance of Industries and Activities Protected by Copyright and Related Rights in the MERCOSUR Countries and Chile," WIPO and State University of Campinas (2002).
[73] The WIPO Copyright Treaty (WCT) (1996), and the WIPO Performances and Phonograms Treaty (WPPT) (1996).
[74] A collection of information resources on WIPO's work as relates to the WCT and WPPT. See generally M. Ficsor, "Law of Copyright and the Internet," (Oxford, 2001); and Silke von Lewinski and Jörg Reinbothe, "WIPO Treaties (1996)," (Butterworths Law, 2001).
[75] The Berne Convention for the Protection of Literary and Artistic Works.
[76] The Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (1961) .
[77] The World Trade Organization (WTO)'s TRIPS Agreement (the Agreement on Trade-Related Aspects of Intellectual Property Rights) came into effect on January 1, 1995, and is the most comprehensive multilateral agreement on intellectual property, covering: copyright and related rights, trademarks including service marks, geographical indications including appellations of origin, industrial designs, patents including the protection of new plant varieties, layout-designs of integrated circuits and undisclosed information including trade secrets and test data. The TRIPS Agreement sets minimum standards of protection to be provided by Members, specifies domestic procedures and remedies for enforcement of intellectual property rights, and makes disputes about TRIPS obligations subject to WTO dispute settlement mechanisms (further information and texts are available on the WTO website).
[78] Berne Convention Art. 9(1). See also Rome Convention Art. 10 and TRIPS Agreement, Art. 14 (providing to phonogram producers the right to authorize or prohibit the "direct or indirect" reproduction of their phonograms). The WPPT also provides to both phonogram performers and producers a broad right of reproduction, whether "direct or indirect," and "in any manner or form" (WPPT Articles 7 and 11). For a detailed discussion of the reproduction, communication and distribution rights, see presentation of C. Clark, General Counsel, International Publishers Copyright Council, First WIPO E-Commerce Conference (September 1999).
[79] WCT, agreed statement concerning Article 1(4); WPPT, agreed statement concerning Articles 7, 11 and 16.
[80] See Digital Millennium Copyright Act, Title II, Pub. L. No. 105-304, 112 Stat. 2860 (1998).
[81] See Art. 5(1) of the Directive 2001/29/EC of the European Parliament and of the Council of May 22, 2001, on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society ("E.U. Copyright Directive"), Refer to para.63.
[82] There has been some debate about whether the widespread deployment of these "trusted systems" (consisting of software and hardware to manage digital rights) may upset the traditional balance in copyright, expressed through the relevant limitations and exceptions. See "Digital Rights and Wrongs," Economist, p.95 (July 17, 1999). "Trusted systems," a term first used by Mark Stefik, principal scientist of Xerox's Palo Alto Research Faculty, refers to software and hardware that can be programmed to provide digital rights management (control access to and copying of material). See M. Stefik, "Trusted Systems," Scientific American, p.78 (March 1997).
[83] Certain commentators have raised questions of whether certain legislation concerning technological measures of protection may have a counter-productive impact on encryption and security research. The United States Digital Millennium Copyright Act (DMCA) contains exceptions for encryption research and security testing that are intended to address this concern. See presentation of S. A. Baker, "Cryptography and Electronic Rights Management: Technology & Policy," at the First WIPO E-commerce Conference (September 1999) See also Patricia Akester, "Survey of Technological Measures for Protection of Copyright," Issue 1, Entertainment Law Review, pp.36-38 (2001).
[84] See discussion of digital rights management in paras.117-118.
[85] Digital Millennium Copyright Act, Public Law No. 105-304, 112 Stat. 2860 (October 28, 1998). See the Congressional Research Service Report for Congress, "Digital Millennium Copyright Act, P.L. 105-304: Summary and Analysis," (November 10, 1998); and U.S. Copyright Office Summary, "The Digital Millennium Copyright Act of 1998," (December 1998). See also Victoria McEvedy, "The DMCA and the E-Commerce Directive," Issue 2, European Intellectual Property Review, pp.65 ? 73 (2001).
[86] See Congressional Research Service Report
for Congress, "Digital Millennium Copyright Act, P.L.
105-304: Summary and Analysis," (November 10, 1998).
[87] Encryption, or cryptography, refers to the process of using software to encode plain text information into cipher text, which can only be decoded by the intended recipients using a key or password. The two main types are public-key encryption (asymmetric) and symmetric encryption. Refer generally to Cryptography A-2-Z at http://www.ssh.fi/tech/crypto/.
[88] A watermark is a "pattern of bits inserted into a digital image, audio or video file that identifies the file's copyright information (author, rights, etc.). The name comes from the faintly visible watermarks imprinted on stationery that identify the manufacturer of the stationery. The purpose of digital watermarks is to provide copyright protection for intellectual property that's in digital format." See Webopedia at http://www.webopedia.com/TERM/d/digital_watermark.html.
[89] In 1998, the Secure Digital Music Initiative (SDMI) was established by record and technology companies to agree on a standard for music copy protection. In September 2000, SDMI issued a public challenge to hack SDMI-encoded and watermarked audio content. The copy protection was hacked in three weeks, and the RIAA initiated legal action to prevent the hacking method from being published. This initiative to reach a common copy-protection standard has been overtaken by various discrete digital rights management schemes. See Ron Harris, "Whatever Happened to SDMI?," Salon.com, (April 29, 2002) at http://www.salon.com. See also the discussion of MP3, Napster and the SDMI, by Jessica Litman, "Digital Copyright," (Prometheus Books, 2001), at pp.154 ?163.
[90] See "How a Copyproof CD Works," Wired Magazine, p.45 (February 2002). See also, Damien Cave, "Chained Melodies," Salon.com, (March 13, 2002) at http://www.salon.com; Christophe Guillemin, "Un site publie une liste des CD musicaux protégés contre la copie," ZDNet France, (2001) at http://news.zdnet.fr.
[91] The United States Senator Fritz Hollings, in March 2002, introduced the draft "Consumer Broadband and Digital Television Promotion Act" (S. 2048). See BNA Inc., "Copyright Owners Think Through Ways of Fighting Piracy, Collecting Royalties," Vol7(42), Electronic Commerce and Law Report (October 30, 2002). See also Declan McCullagh, "Anti-Copy Bill Hits D.C.," Wired News, (March 22, 2002) at http://www.wired.com.
[92] See "FCC Seeks Comment on Numerous Issues Relating to Digital Television "Broadcast Flag"," Vol. 7(32), Electronic Commerce and Law Report, pp.813-814 (August 14, 2002).
[93] Universal City Studios, Inc. et al v. Reimerdes, et al, (S.D.N.Y., January 14, 2000), 82 F. Supp. 2d 211; 2000 U.S. Dist. LEXIS 906; 53 U.S.P.Q.2D (BNA) 1780 (No. 00-CV-0277).
[94] Linux is an example of open source software, being a freely distributed version of the UNIX operating system that runs on various hardware platforms. See the Linux Journal at http://www.linuxjournal.com/. For a discussion of the DeCSS litigation, see Litman supra note 89 pp.152-153.
[95] Preliminary denial of defendant's motion to dismiss, 203 F. Supp. 2d 1111; (CR) 01-20138RMW).
[96] See Reuters, Ltd. , "Lawyers Say Digital Copyright Law Unconstitutional," FindLaw, (April 2, 2002) at http://news.findlaw.com. For a discussion of the history and drafting of the Digital Millennium Copyright Act, see Litman (2001) pp.122-150.
[97] Pub. L. No. 105-304, 112 Stat. 2860 (1998).
[98] The Studies are available from the U.S. Copyright Office, at http://www.copyright.gov/new.html: the Joint Study on Encryption Research is at http://www.loc.gov/copyright/reports/studies/ and the Digital Millenium Copyright Act, s.104 Study is at http://www.copyright.gov/reports/studies/dmca/sec-104-report-vol-1.pdf. In addition, a Study of the Digital Millenium Copyright Act is at http://www.loc.gov/copyright/reports/studies/dmca/dmca_study.html.
[99] For a discussion of the importance of the WPPT and the need for other protection for the recording industry interests, see presentation of J. Vacher and presentation of S. Perlmutter, both at the Second WIPO E-Commerce Conference (September 2001). See also presentation of H. Rosen, President and CEO, Recording Industry Association of America, First WIPO E-Commerce Conference (September 1999).
[100] See WIPO document SCCR/8/2, "Short Description of Possible Subjects for Future Review by the Standing Committee", at http://www.wipo.int/copyright/en/.
[101] Draft legislation (H.R. 5544, the "Digital Media Consumers" Rights Act?) was introduced in the United States legislature on October 3, 2002, by Representatives Frederick C. Boucher (D-Va) and John T. Doolittle (R-Calif), designed to establish principles that would reaffirm the fair use doctrine, allowing consumers to make copies of copyright materials for their personal use, and aimed at maintaining the balance in copyright law. See "Boucher Draws Battle Lines for Future War Over Digital Copying," Vol 7(39), Electronic Commerce and Law Report, p.1001 (October 9, 2002).
[102] Under United Kingdom law, the Copyright Designs and Patents Act (1988) provides fair dealing exceptions to copyright infringement, including for: research or private study (s. 29), reporting current events (s. 30(2)-(3)) and criticism or review (s.30(1)).
[103] See Jim Lahore, "Fair Dealing and the Digital Agenda: Will the Copyright Balance Survive?," Vol.18(1), Copyright Reporter, pp.23-34 (July 2000). See also Litman (2001), supra note 89, at pp.171-191.
[104] See Hilton (2002), supra note 43.
[105] Berne Conventions, Article 9(2); TRIPS Agreement, Article 13.
[106] The New York Times, Co. v. Tasini, (00-201) 206 F.3d 161; affirmed, United States District Court S.D.N.Y. 93 Civ. 8678 (SS), decided August 13, 1997. See Supreme Court decision at http://supct.law.cornell.edu/supct/html/00-201.ZS.html.
[107] Jerry Greenberg and Ida Z. Greenberg v. National Geographic Society, U.S. Court of Appeals for the 11 th Circuit Atlanta, No. 00-10510, D. C. Docket No. 97-03924-CV-JAL; see http://www.adlawbyrequest.com/inthecourts/GreenbergCase1.shtml#decision.; petition for writ of certiorari was denied. National Geographic Society, et al. v. Jerry Greenberg, et al., 01-186, Supreme Court of The United States, 122 S. Ct. 347; 151 L. Ed. 2d 262; 2001 U.S. LEXIS 9493; 70 U.S.L.W. 3267, October 9, 2001, decided.
[108] Refer to discussion of protection of software under patent law at paras.247-49.
[109] The Open Source Initiative, including a full definition of "open source", is at http://www.opensource.org/. See also Richard Stephens, "Copyleft ? All Rights Reversed," Copyright World, pp.28-31 (June/July 2000). See also the separate "free software" movement represented by the Gnu Project of the Free Software Foundation, at http://www.gnu.org.
[110] Civil Judgment of Beijing Haidian District People's Court (1999) Hai Zhi Chu Zi, No.57. See Zhou Lin, ed., "China Court Cases on Intellectual Property Rights," The Chinese People's Public Security University Press (January 2002).
[111] WIPO Workshop on Service Provider Liability (December 9-10, 1999). Three papers commissioned for the Workshop are available online: Kamiel Koelman and Bernt Hugenholtz, "Online Service Provider Liability for Copyright Infringement," OSP/LIA/1; Batur Oktay and Greg Wrenn, "A Look Back at the Notice-Takedown Provisions of the U.S. Digital Millennium Copyright Act One Year After Enactment," OSP/LIA/2; and Nils Bortloff and Janet Henderson, "Notice and Take-Down Agreements in Practice in Europe ? Views from the Internet Service Provider and Telecommunications Industries and the Recording Industry," OSP/LIA/3; all papers are available online.
[112] See Agreed Statement Concerning Article 8, WCT.
[113] Various countries' copyright laws contain concepts of liability for contributing to the infringing activities of another. Generally, the determination of liability will turn on the degree of participation and knowledge of the party that is contributing to the infringement. For discussion of various approaches to this issue, including the United States Digital Millennium Copyright Act and European Union E-commerce Directive, see presentations of T. Casey, Senior VP Technology Law Group, MCI Worldcom; M. Fröhlinger, Head of Unit, Media, Commercial Communications and Unfair Competition, DG XV, European Commission; and S. Perlmutter, Consultant, WIPO; all at the First WIPO E-Commerce Conference (September 1999).
[114] The Global Business Dialogue on Electronic Commerce issued a position paper on the issue, in which it recognized both the DMCA and the draft European Directive as appropriate models for internationally compatible approaches. See "Liability," Issue Group Policy Paper: Final Draft, GBDe (August 3, 1999).
[115] Law No. 137 of November 30, 2001. See legislative texts (in Japanese) at http://www.soumu.go.jp/joho_tsusin/top/pdf/jyoubun.pdf.
[116] Article 12 of the Directive 200/31/EC of the European Parliament and the Council of June 8, 2000, on Certain Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market.
[117] The European Union Directive, 2000/31/EC, (June 8, 2000) on Certain Legal Aspects of Electronic Commerce in the Internal Market (the "E.U. E-Commerce Directive") at http://europa.eu.int/ISPO/ecommerce/legal/documents/2000_31ec/2000_31ec_en.pdf . See Miriam Yakobson, "Copyright Liability of Online Service Providers After the Adoption of the E.C. Electronic Commerce Directive: A Comparison to U.S. Law," Issue 7 (2000), Entertainment Law Review, pp.144-152. For a description of the differences between the two Directives vis-à-vis ISP liability, see Mark Owen and Richard Penfold, "Copyright Infringement in the On-line World," Managing Intellectual Property, pp.44-46 (December 1999/January 2000).
[118] Pub. L. No. 105-304, 112 Stat. 2860 (1998). Title II of the DMCA adds section 512 to the U.S. Copyright Act. See generally, McEvedy (2002), supra note 85, at pp.65-73.
[119] The four categories of activities are: (1) transitory digital network communications; (2) system caching; (3) storing information on systems or networks at direction of users; and (4) information location tools. (Section 512 (a) ? (c)).
[120] ALS Scan, Inc. v. Remarq Communities, Inc., 239 F.3d 619 (4 th Cir. 2001). See William T. McGrath, "U.S. Copyright Case Law Developments in the New Millennium," Copyright World, pp.16-19 (May 2001).
[121] Arista Records Inc. v. AT&T Broadband Corp., S.D.N.Y., complaint filed 8/16/02. See Amy Harmon, "Record Labels Want 4 Internet Providers to Block Music Site," The New York Times, (August 17, 2002) at http://www.nytimes.com.
[122] See presentation of J. Vincent, General Secretary of the International Federation of Musicians (FIM), "Opportunities and Challenges: Performers in the Digital Environment," Seminar on the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT): Opportunities and Challenges, (May 16, 2002) at http://www.wipo.int/news/en/?wipo_content_frame=/news/en/conferences.html.
[123] See http://www.wipo.int/news/en/?wipo_content_frame=/news/en/conferences.html.
[124] See WIPO document A/36/9 Rev. and "General Report of Assemblies of the Member States of WIPO," Thirty Series of Meetings, A/36/15 (October 3, 2001).
[125] A collection of information resources on WIPO's work as relates to protection of audiovisual performances is at http://www.wipo.int/copyright/en/.
[126] See the Recording Industry Association of America (RIAA)'s Webcasting FAQ, at http://www.riaa.com/licensing-licen-3a.cfm.
[127] See paras.103-110.
[128] A statutory license is provided by law, instead of being granted by each copyright owner upon request. See 17 U.S.C. §114 (d) (1994) & Supp.V. 1999 (enacted under Pub.L. No. 105-3-4, §405, 112 Stat. at 2890-94). Refer to a survey of webcasting in Richard D. Rose, "Connecting the Dots: Navigating the Laws and Licensing Requirements of the Internet Music Revolution" Vol.42(3), IDEA ? The Journal of Law and Technology, p.332 (2002). See also Mark W. Ishman and Julie D. Cromer, "Trends in US Copyright Law: Adapting to the Cyber-revolution," Copyright World, pp.20-23 (April 2000).
[129] Twentieth Century Fox Film Corporation v. ICraveTV; National Football League, v. TVRadioNow Corp., d/b/a ICraveTv.com, d/b/a TVRadioNow.com (Civil Action No. 00-121 Consolidated with Civil Action No. 00-120) United States District Court for the Western District of Pennsylvania, February 8, 2000, Decided 2000 U.S. Dist. LEXIS 11670; 53 U.S.P.Q.2D (BNA) 1831; Copy. L. Rep. (CCH) P28,030.
[130] See Joanna Glasner, "Broadcasters Don't Crave This TV," Wired News, (March 26, 2002) at http://www.wired.com.
[131] Research by Viant, at http://www.viant.com. The Motion Picture Association of America (MPAA) shut down a pirated video-on-demand site, Film 88, based in Tehran, which showed full length movie for US$1 without authorization of the movie studios. A similar operation, Movie88.com was earlier shut down in Taiwan, Province of the People's Republic of China. See Stefanie Olsen, "$1 Movie Site Finds Shelter in Iran," ZDNet News, (June 5, 2002) at http://www.zdnet.com.
[132] The creators of Star Wars, Lucasfilm, sponsored a contest for fan-made films but, in an attempt to protect its copyright, limited the competition to spoofs and documentaries, excluding fan films. See Amy Harmon, ""Star Wars" Fan Films Come Tumbling Back to Earth," The New York Times, (April 28, 2002) at http://www.nytimes.com.
[133] See Nick Hanbidge, "Protecting Rights Holders' Interests in the Information Society: Anti-circumvention; Threats Post-Napster; and DRM," Issue 8, Entertainment Law Review, Opinion (2001).
[134] See Paul Bond, "Weapon of Choice," The Hollywood Reporter, pp.8-11 (March 19-25, 2002).
[135] The Broadcast Protection Discussion Group (BPDG) was formed in November 2001 to agree on a technological standard that consumer electronics and computer makers could incorporate in their products to protect digital broadcasts, however no agreement has been reached. See the BPDG's Final Report to the Copy Protection Technical Working Group, (June 3, 2002) at http://www.cptwg.org/Assets/BPDG/home%20page.htm. See also Declan McCullagh, "FCC Wades into Digital TV, Piracy Debate," CNET News.com, (August 7, 2002), at http://www.cnet.com.
[136] The Copy Protection Technical Working Group is at http://www.cptwg.org.
[137] A collection of information resources on WIPO's work as relates to protection of broadcasting organizations is at http://www.wipo.int/copyright/en/.
[138] The Technical Background Paper "Protection of Broadcasting Organizations," SCCR/7/8 is available at http://www.wipo.int/documents/en/meetings/2002/sccr/doc/sccr7_8.doc.
[139] See generally, Ignacio Javier Garrote, "Linking and Framing: A Comparative Law Approach," Issue 4, European Intellectual Property Review, pp.184-198 (2002).
[140] In some jurisdictions, such as the United States of America, copyright infringement has been found as a result of the simple act of linking, if such links facilitate copyright infringement or piracy; see Intellectual Reserve Inc. v. Utah Lighthouse Ministry Inc., United States District Court (C.D. Utah) 75 F. Supp. 2d 1290. A similar reasoning was followed by the Belgian court in IFPI v. Beckers (Antwerp Court of First Instance, at http://www.jura.uni-tuebingen.de/~s-bes1/text/ifpi_v_beckers.PDF). However, in Germany, this practice would seem not to give rise to legal liability, in accordance with §5(3) of the Teledienste-Gesetz, following court decisions in Pfälzer-Links (LG Frankenhalt, Urt. vom 11.28.2000) and Swabedoo (OLG Schleswig-Holstein Urt. vom 12.19.2000). See the discussion by Garrote (2002), supra note 139, at p.184, p.188 and pp.190-191.
[141] See Garrote (2002), supra note 139, at p.184 and pp.187-188. See also Maureen A. O'Rourke, "Fencing Cyberspace: Drawing Borders in a Virtual World," 82 Minnesota Law Review, p. 609 (1998).
[142] See Garrote (2002), supra note 139, at p.184 and p.194.
[143] Article 7(1) and (5). European Union Directive 96/9/EC of March 11, 1996, on the Legal Protection of Databases (at http://europa.eu.int/eur-lex/en/index.html).
[144] In Danish Newspaper Publishers' Association v. Newsbooster.com ApS, Denmark Bailiff's Court, July 5, 2002. The Court found a violation of the Danish Copyright Act, §§ 71(1) and 71(2), enacted in June 1998 pursuant to the European Union's Database Directive. A similar case was brought in the United States of America by the Dallas Morning News against a news site aggregator, BarkingDogs.org. See Farhad Majoo, "Sites Barks About Deep Link," Wired News (May 1, 2002) at http://www.wired.com.
[145] Similarly, in the case of Stepstone v. Ofir, the German Court ordered a Danish company to cease deep-linking the website of its competitor, LG Köln, Urt. vom 28.2.2001. See Michelle Delio, "Deep Linking takes Another Blow," Wired News, (July 25, 2002) at http://www.wired.com. See also Garrote (2002), supra note 139, p.184 at p.192.
[146] See Patrick Tracey, "Dutch Court Rules That Print Newspaper Is Not Covered by Database Protection Law," Vol.7(33), Electronic Commerce and Law Report, pp.843-844 (2002).
[147] See Ishman et al (2000), supra note
128, at pp.20-23.
See "Database Protection: EU Database Directive Invoked to Support Order Barring Deep Linking
to News Sites," Vol 7 (28) Electronic Commerce and Law Report, p.714 (July 17, 2002).
[148] EBay Inc. v. Bidder's Edge Inc., 100 F. Supp.2d 1058 (N.D. Cal, 2000), relied upon in Oyster Software Inc. v. Forms Processing Inc., Case No. C-00-0724 JCS (N.D. Cal. 2001); see 7 Electronic Commerce and Law Report, p.121, (February 6, 2002).
[149] Ticketmaster Corp. v. Tickets.com Inc., 54 U.S.P.Q. 2d 1344 (C.D. Cal., 2000).
[150] Leslie A. Kelly v. Arriba Soft Corporation, No. 00-55521, 280 F.3d 934 (9th Cir., February 6, 2002).
[151] The concept of "fair use" is developed in 17 U.S.C. §107, which lays down four factors to be considered by the courts in determining fair use of a copyright work: (i) the nature of the use of the work; (ii) the nature of the copyrighted work itself; (iii) the amount and substantiality of the portion used; and (iv) the effect of the use upon the potential market for the copyrighted work.
[152] 111 F. Supp. 2d 294 (S.D.N.Y. 2000), involving §1201(a)(2) of the DMCA. The DeCSS program was designed to decrypt copy-protected DVDs, so as to enable them to be played on Linux-based operating systems.
[153] Decision of the Hanseatic
Oberlandesgericht of Hamburg,
Oberlandesgericht Hamburg, Urteil vom, February 22, 2001, 3 U 247/00
- Online-Lexikon (available at
http://www.netlaw.de/urteile/olghh_06.htm). See Garrote (2002),
supra note 139, at p.196.
[154] See paras.96-97.
[155] European Union Directive 96/9/EC of March 11, 1996, on the Legal Protection of Databases, available(at http://europa.eu.int/eur-lex/en/index.html. For a discussion of the Directive, see WIPO "Summary on Existing Legislation Concerning Intellectual Property in Non-Original Databases," WIPO Document SCCR /8/3 (September 13, 2002), available at http://www.wipo.int/copyright/en/. See also presentation of C. Clark, First WIPO E-Commerce Conference (September 1999).
[156] For a detailed discussion of databases, as well as various means for their protection, see presentation of M. Glazier, Chief Counsel, Subcommittee on Courts and Intellectual Property Committee on Judiciary, U.S. House of Representatives; presentation of J. Reinbothe, DGXV, European Commission; and presentation of A. Millé, Partner, Estudio Millé, First WIPO E-Commerce Conference (September 1999).
[157] The studies are available online: "Economic Impact of the Protection of Unoriginal Databases in Developing Countries and Countries in Transition", Study by Thomas Riis, SCCR/7/4 (at http://www.wipo.int/documents/en/meetings/2002/sccr/pdf/sccr7_4.pdf ); Study by Yale M. Braunstein, SCC/7/2 (at http://www.wipo.int/documents/en/meetings/2002/sccr/pdf/sccr7_2.pdf); Study by Phiroz Vandrevala, SCCR/7/5 (at http://www.wipo.int/documents/en/meetings/2002/sccr/pdf/sccr7_5.pdf); Study by Sherif El-Kassas (at http://www.wipo.int/documents/en/meetings/2002/sccr/pdf/sccr7_3.pdf); Study by Zheng Shengli (at http://www.wipo.int/documents/en/meetings/2002/sccr/pdf/sccr7_6.pdf). See also presentation by A. Millé, Partner, Estudio Millé, "Protection of Databases Workshop," First WIPO E-Commerce Conference (September 1999).
[158] See WIPO "Summary on Existing Legislation Concerning Intellectual Property in Non-Original Databases," WIPO Document SCCR /8/3 (September 13, 2002), available at http://www.wipo.int/copyright/en/. A collection of information resources on WIPO's work as relates to the protection of non-original databases is at http://www.wipo.int/copyright/en/.
[159] See Forrester Research Report, "Downloads Did Not Cause The Music Slump, But They Can Cure It," Forrester Research, (August 13, 2002) at http://www.forrester.com/ER/Press/Release/0,1769,741,FF.html.
[160] See http://www.mp3.com.
[161] UMG Recordings, Inc. v. MP3.Com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y., 2000). A later case determined how statutory damages for such infringements could be calculated: see UMG Recordings, Inc. v. MP3.Com, Inc., 109 F. Supp. 2d. 223 (S.D.N.Y., 2000).
[162] See generally, Rose supra note 128 (2002) at pp.313-360. See also, Giovanna Fessenden, "Peer-to-Peer Technology: Analysis of Contributory Infringement and Fair Use," Vol.42(3), IDEA ? The Journal of Law and Technology, pp.391-416 (2002); and John Borland, "Échange de fichiers P2P: les internautes prochaines cibles des majors?," ZDNET, (July 2002) at http://news.zdnet.fr.
[163] The United States District Court for the Northern District of Illinois granted a preliminary injunction to the plaintiffs in Re: Aimster Copyright, 1:01-cv-08933 Docket Date: 09/05/02 MINUTE ORDER of 9/4/02 by Hon. Marvin E. Aspen, see http://www.ilnd.uscourts.gov/MinOrds/minords.htm.
[164] See presentation of R. Gooch, Senior Technology Adviser, International Federation of Phonographic Industry (IFPI), London, at WIPO Seminar on the WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty: Opportunities and Challenges, Geneva (May 16, 2002.
[165] See Larry Dignan, " Study: Kazaa, Morpheus Rave On," CNNET News, (August 14, 2002.
[166] A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9 th Cir., 2001).
[167] 239 F.3d at 1015. See McGrath (2001), supra note 120, at pp.16-18. See also Hanbidge (2001), supra note 133.
[168] Source; International Federation of the Phonographic Industry (IFPI), May 2002. But see also Forrester Research (2002).
[169] See Steven Bonisteel, ""Legitimate" Music Losing Ground Online in Europe ? Report," Newsbytes, (April 19, 2002) at http://www.newsbytes.com.
[170] See The Associated Press, "Music Labels Settle with Audiogalaxy," Australian IT, (June 18, 2002) at http://www.australianit.com.au.
[171] Tokyo District Court, H14 (Yo) 22010, Case of civil provisional disposition on copyright, April 11, 2002. Original Tokyo District Court decision in Japanese, and the English summary.
[172] Soribada was the largest of between 700 and 800 Korean P2P sites and registered about 12 million users. See Martyn Williams, "Users scramble as "Korea's Napster" is shut down," IDG News Service, (August 9, 2002.
[173] In an action brought by the Motion Picture Association of America against KaZaA, Musiccity.com Inc., Musiccity Networks Inc., and Grokster Ltd., alleging that the digital file-sharing network operators were liable for contributory and vicarious infringement of copyrights. See Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd., C.D. Cal., No. 2:01cv08541). See "Kazaa Denies Copyright Infringement Claims; Developer Says P2P No Different Than HTTP," Vol 7(5), Electronic Commerce and Law Report, p.99 (January 30, 2002).
[174] KaZaA v. Buma-Stemra, Gerechtshof Amsterdam, March 28, 2002, rolnr. 1370/01; see reference (in Dutch) at http://www.javisite.nl/Artikel1/0201-028JU.pdf . See also Reuters, "KaZaA Gets the Green Light," Wired News, (March 28, 2002) at http://www.wired.com.
[175] See Steptoe & Johnson, E-Commerce Law Week, Issue 213, (August 10, 2002) at http://www.steptoe.com/WebDoc.nsf/LawNet-Main/Main.
[176] See Declan McCullagh, "Music Body Presses Anti-Piracy Case," CNET News.com, (August 21, 2002) at http://www.news.com.com/2100-1023-954658.html.
[177] See Amy Harmon, "Record Labels Want 4 Internet Providers to Block Music Site," The New York Times, (August 17, 2002) at http://www.nytimes.com.
[178] See Associated Press, "MPAA Snooping for Spies," Wired News, (July 22, 200.
[179] See David Segal, "A New Tactic in the Download War: Online "Spoofing" Turns the Tables on Music Pirates," Washington Post, (August 21, 2002) at http://www.washingtonpost.com.
[180] See "Berman Introduces Bill Immunizing Copyright Owners from Liability for Self-Help Hacking," Vol 7(30), Electronic Commerce and Law Report, p.769 (July 31, 2002).
[181] Critics of the U.S. legislation have raised the hypothesis that Americans who rely upon the domestic legislation to pursue pirates by accessing their computer systems could become liable to refused entry or criminal prosecution in Australia, under applicable Australian legislation. See Nathan Cochrane, "Copyright Bill Will Create Vigilantes: Critics," The Age, (August 6, 2002) at http://www.theage.com.au.
[182] For a general survey of the subject of collective management of rights, see M. Ficsor, "Collective Management of Copyright and Related Rights," WIPO Document No.855(E) (October 2002).
[183] The practice is commonly used in relation to the licensing of the right of public performance (music played or performed in halls, discotheques, restaurants and other public places), the broadcasting right (live and recorded performances on radio and television), the mechanical reproduction right in musical works (the reproduction of works in compact discs, tapes, vinyl records, cassettes, mini-discs or other forms of recordings), the performing rights in dramatic works (theater plays), the right of reprographic reproduction of literary and musical works (photocopying) and related rights or the rights of performers and producers of phonograms to obtain remuneration for broadcasting or the communication to the public of phonograms. Other rights have traditionally not been managed through such collective systems, such as, for instance, rights in software and films.
[184] See http://www.cisac.org.
[185] See http://www.iffro.org.
[186] For an important initiative in the area of identifiers, see the work of the International DOI (Digital Object Identifier) Foundation at http://www.doi.org.
[187] For a discussion of digital rights management, see presentations of R. Kahn, President, Corporation for National Research Initiatives; N. Garnett, Senior Vice President, MetaTrust Utility, InterTrust Technology Corporation; T. Koskinen-Olsson, Chief Executive Officer, Kopiosto; and N. Paskin, Director, The International DOI Foundation, WIPO Second International Conference on Electronic Commerce and Intellectual Property (September 2001), at http://ecommerce.wipo.int/meetings/2001/conference/program/index.html, and presentations of L. Chiariglione, Division Head, Multimedia Technologies and Services, Centro Studi e Laboratori Telecommunicazioni; D. Gervais, Vice President, International Copyright Clearance Center & Partner, Brouillette, Charpentier, Fortin; T. Koskinen-Olsson, Chair, International Federation of Reproduction Rights Organizations; N. Paskin, Director, The International DOI Foundation; and H. Rosen, President and Chief Executive Officer, Recording Industry Association of America, First WIPO E-Commerce Conference (September 1999), at http://ecommerce.wipo.int/meetings/1999/program/wednesday.html. See also D. Marks, Senior Counsel Intellectual Property, Time Warner Inc. and B. Turnbull, Partner, Weil, Gotshal & Manges LLP, Technical Protection Measures: The Intersection of Technology, Law and Commercial Licenses, WIPO Document No. WCT-WPPT/IMP/3 (December 3, 1999) and T. Koskinen-Olssson, Chief Executive Officer, Kopiosto and D. Gervais, Acting Director, Rightsholder Relations, Copyright Clearance Center, Electronic Commerce and Copyright: A Key Role for WIPO, WIPO Document No. ACMC/2/1 (November 17, 1999) at http://www.wipo.int/documents/en/meetings/1999/acmc/index.htm.
[188] For a discussion of these provisions, see paras.56-57.
[189] For certain developments in the United States of America in the area of standards for DRM systems, see the discussion at http://www.ala.org/washoff/digrights.html#bband.
[190] See the discussion of the so-called "Santiago Agreements" in Ficsor (2002), supra note 182, at pp.111-120. See also the VERDI (Very Extensive Rights Data Information) Project, at http://www.verdi-project.com.
[191] See, for instance, the introduction of a new levy in France on the purchase of digital electronic devices equipped with memory-capable hard drives, Decision No. 3 of July 4, 2002, of the Commission established under Article L. 311-5 of the French intellectual property code concerning compensation for private copies, Journal Officiel No. 174, July 27, 2002, p.12877, as reported in World Internet Law Report, p.4 (August 2002).
[192] It may be noted that certain informational goods, such as software and data, are almost inherently non-transparent, meaning the consumer cannot detect the quality of the goods up-front. Consumers will be relying in large part on the reputation of the seller, and place value in the relationship with that company and its ability to provide service (including future product upgrades). See comments of Prof. B. De Long, Dept. of Economics, University of California at Berkeley, "Analytical Summary and Report," The Digital Economy in International Perspective: Common Construction on Regional Rivalry, Conference of the University of California E-conomy Project (May 1999), at http://e-conomy.berkeley.edu.
[193] See Laura Rush, "Top E-Commerce Companies Analyzed, Insights-Trends," Wells Fargo eStore, (July 25, 2002).
[194] See WIPO document " Use of Trademarks on the Internet: Issues Paper" (SCT/3/4), para.6 (1999).; see also, Report of first WIPO Internet Domain Name Process ("first WIPO Process", 1999), at para.34.
[195] The Paris Convention for the Protection of Industrial Property (the Paris Convention), to which 163 States are party, and the TRIPS Agreement. See Chapter III(c).
[196] Data from Gartner. See " VeriSign Study Finds American Express, Mercedes, BMW, Ford and Toyota Excel at Protecting Their Brands Online," (August 19, 2002).
[197] See generally Regis McKenna, "Total Access: Giving Customers What They Want in an Anytime, Anywhere World," (Harvard Business School Press, 2002) at Ch.4.
[198] A keyword system is based on technology that is independent to the domain name system, and operates on a layer "above" it: see ICANN, Internationalized Domain Names (IDN) Committee, " Briefing Paper on Internet Keyword Issues," (February 15, 2002). See, for example, the Internet keyword service offered by Netscape.
[199] This is evidenced by the replies to the WIPO Questionnaire, " Hypothetical Cases Concerning the Use of Trademarks on the Internet", summarized in WIPO document SCT/3/2 (1999), paras.16-21 .
[200] See WIPO document SCT/2/9, paras.79-104 (1999). See also Stanley U. Paylago, "Search Engine Manipulation: Creative Use of Meta tags or Trademark Infringement?" 40(3), IDEA - The Journal of Law and Technology, pp.451-471 (2000); D. M. Cendali, C. E. Forssander and R. J. Turiello Jr., "An Overview of Intellectual Property Issues Relating to the Internet," 89 Trademark Reporter, pp.529 532 (1999); S. Chong, "Internet Meta-tags and Trade Mark Issues," European Intellectual Property Review, at pp.275-277 (1998); N. S. Greenfield and L. Cristal, "The Challenge to Trademark Rights by Web Technologies: Linking Framing, Metatagging and Cyberstuffing," Trademark Law and the Internet, pp.207 216 (1999); T. F. Presson and J. R. Barney, "Trademarks as Meta tags: Infringement or Fair Use?," AIPLA Quarterly Journal, pp.147-178 (1998).
[201] See generally, Neel Chatterjee and Steve Adams, "The Ghost in the Machine: Trademark Liability Resulting from Meta tags," 16 World Intellectual Property Report, pp.27-30 (2002).
[202] See the replies to the WIPO Questionnaire, para.17, available at http://www.wipo.int/about-ip/en/?wipo_content_frame=/about-ip/en/development_iplaw/index.htm.
[203] Tata Sons Limited v. Bodacious Tatas & ors, unreported ex parte interim injunction order of the Delhi High Court dated January 25, 1999: referred to by Pravin Anand, First WIPO E-Commerce Conference (September 1999).
[204] Genertel SpA v Crowe Italia Srl, (January 18, 2001), in International IT and New Media Update, Freshfields Bruckhaus Deringer, (Summer 2001).
[205] See Brookfield Communications Inc. v. West Coast Entertainment Corp, 50 U.S.P.Q. 2d 1545 (9 th Cir. 1999). A similar approach is taken in the recent decision by the Tribunal de grande instance de Paris (March 24, 1999) in Société Kaysersberg Packaging v. Société Kargil; and in the judgment of the Landgericht Mannheim, 7 O 291/97 (August 1, 1997), involving the trademark "ARWIS."
[206] "Initial interest confusion" was described by the District Court in the American case of Playboy Enterprises, Inc. v. Netscape Communications Corp. (55 F. Supp. 2d 1070 (C.D. Ca., 1999) at 1073) as follows:
"Generally speaking, initial interest confusion may result when a user conducts a search using a trademark term and the results of the search include websites not sponsored by the holder of the trademark term, but rather of competitors. (citing Brookfield Comm., Inc. v. West Coast Ent. Corp., 174 F.3d 1036, 1062-64 (9 th Cir. 1999)). The Ninth Circuit reasoned that the user may be diverted to an unsponsored site, and only realize that she has been diverted upon arriving at the competitor's site. Once there, however, even though the user knows she is not in the site initially sought, she may stay. In that way, the competitor has captured the trademark holder's potential visitors or customers."
See generally Yelena Dunaevsky, "Don't Confuse Metatags with Initial Interest Confusion, " 29 Fordham Urban Law School Journal, p.1349 (February 2002).
[207] 985 F. Supp. 1220 (N.D. Cal. 1997).
[208] 1998 U.S. Dist. LEXIS 10459 (E.D. Va. 1998).
[209] See Playboy v. Enterprises Inc. v. Welles, 7 F. Supp.2d 1098, 47 U.S.P.Q.2d 1186. See also Bernina of America v. Fashion Fabrics International, 2001 U.S. Dist. LEXIS 2122, at pp.7-8.
[210] 55 F. Supp. 2d 1070 (C.D. Cal.) affirmed without opinion 202 F. 3d 278 (9th Cir. 1999).
[211] Numtec Interstahl, OGH, December 19, 2000, 4 Ob 308/00y. Original text (in German) at http://www.internet4jurists.at/entscheidungen/ogh4_308_00y.htm.
[212] Philippine Long Distance Telephone Company, Inc. v. Philippine League for Democratic Telecommunications, Inc. and Gerardo B. Kaimo, Republic of the Philippines Regional Trial Court, National Capital Judicial Region, Quezon City, Branch 90, Civil Case No. 99-38800; seehttp://www.pldt.com/ourcase.htm.
[213] Bihari v. Gross, 119 F. Supp. 2d 309 (S.D.N.Y. 2000).
[214] An order issued by the United States Court of Appeals for the Seventh Circuit on October 18, 2002, modified its earlier opinion in Promatek Industries Ltd. v. Equitrac Corporation, (No. 00-4276, August 13, 2002), granting an injunction against the use of a competitor's misspelt trademark as a meta tag. The order removed a sentence of the earlier opinion which stated that the use of a competitor's trademark in a website was "a prohibited practice because of its potential for customer confusion" and replaced it with a sentence which read: "The problem here is not that Equitrac, which repairs Promatek products, used Promatek's trademark in its metatag, but that it used that trademark in a way calculated to deceive consumers into thinking that Equitrac was Promatek." See BNA Inc. "Seventh Circuit Clarifies Views on Metatags: "Legitimate" Nondeceptive Uses Are Permitted," Vol 7(42), Electronic Commerce and Law Report, (October 30, 2002).
[215] See table in para.126.
[216] Chatterjee and Adams (2002), supra note 201, at p.28.
[217] See Playboy Enterprises Inc. v. Netscape Communications Corp., C.D. Calif., No. SA CV 99-320 AHS (Eex) (June 24, 1999). See also the replies to the WIPO Questionnaire, para.18, showing a wide divergence of views.
[218] W.D. Texas, San Antonio Division, Case No. SA-02-CA-0087 EP, complaint filed on January 31, 2002.
[219] At http://www.advantage.msn.co.uk/flattened/3B5B34D1-1D47-4122-B90B-D3A4CB43D73A.asp.
[220] Washingtonpost.Newsweek Interactive Co. v. Gator Corp., E.D. Va., Civil Action No.02-909-A, July 16, 2002. See Bureau of National Affairs, Inc., "Third Party Pop-Up Advertisements Likely Violated Trademarks in plaintiffs' Sites," BNA E-Commerce Law Daily, (July 19, 2002). See also Anick Jesdanun, "Publishers Sue Over Pop-Up Ads," FindLaw, (June 28, 2002) at http://www.findlaw.com.
[221] See the definition of mousetrapping at http://www.webopedia.com/TERM/M/mousetrapping.html.
[222] FTC v. Zuccarini, Civil Action No. 01-CV-4854; U.S. District Court for the Eastern District of Pennsylvania, 2002, U.S. Dist. LEXIS 13324; 2002-1 Trade Cas. (CCH) P73,690, April 9, 2002. See Associated Press, "Online Mousetrapping Leads to $1.9 million Fine," USA Today, (May 24, 2002) at http://www.usatoday.com/life/cyber/2002/05/24/mousetrapping-ftc.htm.
[223] See para.94.
[224] For a general description of linking, see http://www.bitlaw.com/internet/linking.html.
[225] Ticketmaster Corp. v. Microsoft Corp., CV 97-3055 RAP (C.D. Cal., filed April 28, 1997), at http://www.jmls.edu/cyber/cases/ticket1.html.
[226] Ticketmaster Corp. v. Tickets.com, Inc., Case No. CV99-7654-HLH (BQRx), U.S. District Court for The Central District of California, 2000 U.S. Dist. LEXIS 12987; Copy. L. Rep. (CCH) P28,146, August 10, 2000, Decided.
[227] Ford Motor Company v. 2600 Enterprises, et al., 177 F. Supp. 2d 661, 2001 U.S. Dist. Lexis 21302 (E.D. Michigan, December 20, 2001).
[228] See para.99.
[229] Washington Post Co. v. Total News, Inc., No. 97 Civ. 1190 (PKL) (S.D.N.Y.). The Washington Post's complaint is at http://www.jmls.edu/cyber/cases/total1.html. A line of cases in trademark law on the repackaging of trademarked goods also offers support for the contention that framing may violate trademark law, see http://www.dlib.org/dlib/april98/04orourke.html.
[230] See paras.154-166. The Joint Recommendation Concerning Provisions on the Protection of Marks, and Other Industrial Property Rights in Signs, on the Internet (with Explanatory Notes), adopted by the Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of WIPO, at the Thirty-Sixth Series of Meetings of the Assemblies of the Member States of WIPO (September 24-October 3, 2001) is available at http://www.wipo.int/about-ip/en/?wipo_content_frame=/about-ip/en/development_iplaw/index.htm.
[231] Under Article 19 of the TRIPS Agreement, the trademark can be cancelled only after an uninterrupted period of at least three years.
[232] See WIPO document SCT/2/9 (1999), supra note 200, at paras.60-61 .
[233] This view is supported by the responses to the WIPO Questionnaire to which 36 States replied. The responses are summarized in "Use of Trademarks on the Internet. Summary of Responses to Questionnaire," WIPO document SCT/3/2 (1999) supra note 199. See, in particular, paras.14-15 with regard to maintenance of rights. See further the factors for establishing a relationship with a particular country listed in WIPO document SCT/2/9 (1999), supra note 200, at paras.31-34 .
[234] See for example the decisions of the Tribunal de Grande Instance de Nanterre, Ordonnance de référé (October 13, 1996); SG2 v. Brokat Informationssysteme GmbH ("payline") and of the Kammergericht Berlin, 5 U 659/97 (March 25, 1997) (" Concert-Concept"). A majority of replies to the WIPO Questionnaire indicated that the use of a trademark on a "passive" website (i.e., a website that is devoted to advertising) would be regarded as a trademark infringement, see WIPO document SCT/3/2 (1999), supra note 199, at para.10.
[235] See WIPO document SCT/2/9 (1999), supra note 200, at para.62.
[236] See WIPO document SCT/2/9 (1999), supra note 200, at paras.19-22.
[237] See the replies to the WIPO Questionnaire, para.10, available at http://www.wipo.int/about-ip/en/?wipo_content_frame=/about-ip/en/development_iplaw/index.htm.
[238] See WIPO document SCT/2/9 (1999), supra note 200, at paras.37 and 66.
[239] This is explicitly recognized by Article 17 of the TRIPS Agreement.
[240] See WIPO document SCT/2/9 (1999), supra note 200, paras.98 to 101; see also D. M. Kelly & J. M. Gelchinsky, "Trademarks on the Internet: How Does Fair Use Fare?," 114 Trademark World, pp.19-22 (1999).
[241] See e.g., Bally Total Fitness Holding Corp. v. Faber, C.D. Cal., No. CV 98-1278 DDP (MANx), (December 21, 1998); see also Cendali et al (1999), supra note 200, pp.543-557 (on issues of free speech, privacy, and defamation).
[242] See WIPO SCT/3/4 (1999), supra note 194, at paras.27-31.
[243] See e.g., the decisions of payline (1996) and of Concert-Concept (1997), and the more restrictive approach applied in Playboy Enterprises Inc. v. Chuckleberry Publishing, Inc., 939 F. Supp.1032, 1039-40 (S.D.N.Y. 1996).
[244] A majority of the States that replied to the WIPO Questionnaire indicated that, in infringement cases, courts would have to limit the effect of their decisions to the territory where the infringed trademark enjoys protection, see WIPO document SCT/3/2 (1999), supra note 199, at para.11.
[245] See WIPO document SCT/2/9 (1999), supra note 200, at paras.67 to 69.
[246] An example of this abusive practice might be cases of conflicts between well-known marks and domain names, as envisaged under Article 6 of the Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, adopted by the Assembly for the Paris Union for the Protection of Industrial Property and the General Assembly of WIPO, at the Thirty-Fourth Series of Meetings of the Assemblies of the Member States of WIPO (September 20-29, 1999), available at http://www.wipo.int/about-ip/en/?wipo_content_frame=/about-ip/en/development_iplaw/index.htm.
[247] See WIPO document SCT/2/9 (1999), supra note 200, at paras.59, 127, and 145-148.
[248] "In determining bad faith for the purposes of this paragraph, the competent authority shall take into consideration whether the person who obtained the registration of or used the mark which is in conflict with a well-known mark had, at the time when the mark was used or registered, or the application for its registration was filed, knowledge of or reason to know of, the well-known mark" (Article 4(5)(c), Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (1999)).
[249] In its preparatory work from 1999 to 2001, the SCT examined the feasibility of harmonizing national rules about use and infringement of trademarks on the Internet, and produced a report: "Study on Trademarks on the Internet." The SCT also conducted a survey of national laws relating to uses of trademarks on the Internet: "The Summary of Reponses to the Questionnaire," WIPO Document SCT/3/2 (1999), supra note 199, and WIPO Document SCT/3/4 (1999), supra note 194: all SCT documents are available at http://www.wipo.int/about-ip/en/?wipo_content_frame=/about-ip/en/trademarks.html.
[250] Joint Recommendation Concerning Provisions on the Protection of Marks, and Other Industrial Property Rights in Signs, on the Internet (2001).
[251] "Competent authority" is defined by the Joint Recommendation to mean "an administrative, judicial or quasi-judicial authority of a Member State which is competent for determining whether a right has been acquired, maintained or infringed, for determining remedies, or for determining whether an act of competition constitutes an act of unfair competition as the case may be": Joint Recommendation Concerning Provisions on the Protection of Marks (2001), Article 1(iv).
[252] The term "commercial effect" was preferred to "in the course of trade," so as to include situations in which a non-profit company has produced a commercial effect by using a sign on the Internet without using it "in the course of trade." A sign can have a commercial effect without any business transactions being carried out in that Member State.
[253] Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (1999), Article 2(1).
[254] See Report of the first WIPO Process (1999) at para.247.
[255] The protection of well-known marks in the Paris Convention is provided for in Article 6 bis, section (1) of which provides as follows:
"The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith."
[256] While Article 6 bis of the Paris Convention is silent on what constitutes a well-known mark, Article 16.2 of the TRIPS Agreement provides some guidance as to the criteria that such a competent authority must take into account in forming its assessment:
"Article 6 bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services. In determining whether a trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark."
For discussion of international and national protection of well-known marks, see F. W. Mostert, "Famous and Well-Known Marks," (Butterworths, 1997).
[257] See Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (1999), Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications, WIPO document SCT/3/8 (October 1999).
[258] See Ibid., Article 2. (Determination of Whether a Mark is a Well-Known Mark in a Member State).
[259] The UDRP (Article 4(a)) provides that registration of a domain name shall be considered to be abusive when the complainant is able to establish the following three conditions:
(i) the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) the registrant has no rights or legitimate interests in respect of the domain name; and
(iii) the domain name has been registered and is being used in bad faith.
The UDRP, adopted by ICANN on August 26, 1999, is available at http://www.icann.org/dndr/udrp/policy.htm. See also, Report of the First WIPO Process (1999), at para.171.
[260] In particular, Article 10 bis of the Paris Convention provides that States party to the Treaty must provide effective protection against unfair competition. Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition, and in particular "all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor."
[261] Article 39 of the TRIPS Agreement relies on the obligation to provide protection against unfair competition in Article 10 bis of the Paris Convention as a basis for extending protection to "undisclosed information," also known under various national laws as trade secrets.
[262] See the responses to the WIPO Questionnaire, paras.16-21; a majority of responses considered Internet-specific forms of trademark use, such as meta tagging and sale of keywords, as acts of unfair competition.
[263] See M. Hardie, "Hooked on Broadband," The Forrester Report (July 1999), at http://www.forrester.com.
[264] A domain name is the alphanumeric address of a computer on the Internet, such as http:// www.wipo.int. It enables a user to locate an Internet site without having to resort to its unique numerical or IP (Internet Protocol) address (such as 192.91.247.53). Certain Internet databases contain lists of domain names with the corresponding numerical addresses, enabling the domain name to be linked to the IP address and therefore connect computers via the Internet, upon request. The domain name system (DNS) is organized hierarchically, which allows for the decentralized matching of names and addresses.
[265] See http://ecommerce.wipo.int/primer/index.html.
[266] This Policy is based on the recommendations made by WIPO in its Report of the first WIPO Internet Domain Name Process (April 30, 1999). See "The Management of Internet Names and Addresses: Intellectual Property Issues," available at http://wipo2.wipo.int/process1/report/finalreport.html.
[267] The functions of ICANN are explained in this Chapter, at para.203.
[268] Supra note 194.
[269] See paras.186 to 201 of the WIPO Primer on Electronic Commerce and Intellectual Property Issues at http://ecommerce.wipo.int/primer/index.html.
[270] See http://www.icann.org/minutes/prelim-report-16nov00.htm#Second Annual Meeting.
[271] See the .aero registration service site at http://www.sita.com/.
[272] See the .biz registration service site at http://www.neulevel.biz/.
[273] See the .coop registration service site at http://www.cooperative.org/.
[274] See the .info registration service site at http://www.afilias.info/gateway/.
[275] See the .museum registration office site at http://musedoma.museum/.
[276] See the .name registration service site at http://www.gnr.com.
[277] See the .pro registration service site at http://www.registrypro.com/.
[278] See http://www.icann.org/tlds/.
[279] Ibid.
[280] See http://www.icann.org/registrars/accredited-list.html.
[281] See Resolution 01.74, preliminary report of the meeting of the ICANN Board in Stockholm, June 4, 2001, at http://www.icann.org/minutes/prelim-report-04jun01.htm#01.74.
[282] The framework of the evaluation process is being devised by the "New TLD Evaluation Process Planning Task Force," the terms of reference of which are given at http://www.icann.org/committees/ntepptf. This Task Force conducted public inquiries and published its report on July 31, 2002, available at http://www.icann.org/committees/ntepptf/final-report-31jul02.htm.
[283] ASCII is short for "American Standard Code for Information Interchange." For more information and examples of ASCII characters, seehttp://www.asciitable.com/.
[284] See the IETF Working Group site at http://www.i-d-n.net.
[285] See the list of DNS internationalized domain name solution providers, either existing or planned, ("Current/Planned Solution Providers").
[286] See Resolution 1.39 of the Board of ICANN at http://www.icann.org/committees/idn/.
[287] See the final report published on August 28, 2001. This report was preceded by another published in June 2000 which gave an account of the first findings of a survey conducted on the technical and legal questions raised by the internationalization of domain names.
[288] See http://www.icann.org/committees/idn/final-report-27jun02.htm. Work in this area was planned for completion by the ICANN Meeting, Shanghai, October 2002. See Resolution 02.89 of the ICANN Board .
[289] See http://www.itu.int/mlds/.
[290] See http://www.itu.int/mlds/briefingpaper/itu/mdns-briefing-paper-final.doc.
[291] See http://ecommerce.wipo.int/domains/international/.
[292] See Report of the Second WIPO Internet Domain Name Process, "The Recognition of Rights and the Use of Names in the Internet Domain Name System," at paras.22-27, (September 3, 2001).
[293] To date, the WIPO Center has received 32 complaints for internationalized domain names under the UDRP, in scripts including Chinese, Danish, French, German, Japanese, Korean, Norwegian, Spanish and Swedish characters. Refer to para.220.
[294] See http://www.commonname.com.
[295] See http://www.netscape.com/.
[296] See http://www.commonname.com/en/pcn/help/cn_disputepolicy.asp.
[297] See RFC 2826, "IAB Technical Comment on the Unique DNS Root" .
[298] See the third component of ICANN's Internet coordination policy (ICP-3), "A Unique, Authoritative Root for the DNS" at http://www.icann.org/icp/icp-3.htm.
[299] See http://www.new.net/policies_dispute.tp.
[300] The procedural details of the introduction of .eu are set down in a European Commission communication dated July 5, 2000, and addressed to the Parliament and Council. The communication is available online.
[301] See text online
[302] The importance of making the contact details of domain name holders available was discussed in detail in the Report on the Second WIPO Internet Domain Name Process (2001), supra note 292, at paras.323-345. See also the WIPO ccTLD Best Practices for the Prevention and Resolution of Intellectual Property Disputes.
[303] See the European Commission press release " Internet: Commission seeks views on cybersquatting," IP/02/1178
[304] The statutes of ICANN, and also information on its various meetings and activities, are to be found at http://www.icann.org.
[305] See Framework for Global Electronic Commerce, (July 1, 1997), at http://www.ecommerce.gov.
[306] See http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm; see also the Green Paper of the National Telecommunications and Information Administration (NTIA) published on January 30, 1998, and entitled "A proposal to improve the technical management of Internet names and addresses", at http://www.ntia.doc.gov/ntiahome/domainname/dnsdrft.htm.
[307] See http://www.ntia.doc.gov/ntiahome/domainname/icann.htm.
[308] See http://www.icann.org/general/lynn-reform-proposal-24feb02.htm.
[309] See Final Implementation Report and Recommendations of the Committee on ICANN Evolution and Reform, October 2, 2002 at http://www.icann.org/committees/evol-reform/final-implementation-report-02oct02.htm.
[310] For a full definition of the Enum Protocol, see "Tutorial Paper on the Global Implementation of Enum," International Telecommunication Union, February 8, 2002, at http://www.itu.int/itudoc/itu-t/workshop/enum/index.html.
[311] A URI is a sequence of characters that enables resources such as a document, image, file, database or e-mail address to be identified.
[312] See http://www.itu.int/osg/spu/Enum/index.html.
[313] See http://www.ofcom.ch/en/aktuell/enum/popup5/popup.html.
[314] See "The History and Context of Telephone Number Mapping (ENUM)" at http://www.ietf.org/rfc/rfc3245.txt?number03245.
[315] See http://www.itu.int/osg/spu/Enum/index.html
[316] Beside the WIPO Arbitration and Mediation Center, the other institutions originally accredited by ICANN were the National Arbitration Forum, e-Resolution and the CPR Institution for Dispute Resolution. Subsequently, e-Resolution discontinued its activities in November 2001 and, in December 2001, ICANN accredited the Asian Domain Name Dispute Resolution Center, which became operational on February 28, 2002.
[317] The percentages exceed 100% because some cases involve multiple domain names in different gTLDs.
[318] A statistical analysis of the cases filed with the WIPO Arbitration and Mediation Center under the UDRP is available at the Center's site, at http://www.arbiter.wipo.int/domains/statistics/index.html.
[319] See http://www.arbiter.wipo.int/domains/filing/udrp/index.html.
[320] See http://www.arbiter.wipo.int/domains/panel/index.html.
[321] Document SCT/S1/3, presented by the International Bureau of WIPO in October 2001 in connection with the special sessions on the Report on the Second WIPO Internet Domain Name Process, gives a more detailed account of the procedures introduced by the registry operators of the new generic top-level domain. The document is available at http://www.wipo.int/sct/en/documents/special_session/doc/sct_s1_3.doc.
[322] See http://websvr01.afilias.info/register/dispute_resolution/sunrise_challenge_policy.
[323] See http://www.arbiter.wipo.int/domains/gtld/biz/stop/index.html.
[324] See http://www.arbiter.wipo.int/domains/gtld/name/index.html.
[325] See http://www.arbiter.wipo.int/domains/gtld/biz/rdrp/index.html#1.
[326] See http://www.icann.org/tlds/agreements/sponsored/sponsorship-agmt-att12-08sep01.htm.
[327] The list of the ccTLDs and of the cases submitted to the WIPO Center may be consulted at http://www.arbiter.wipo.int/domains/cctld/index.html.
[328] The decisions in these cases can be downloaded from the WIPO Center's site, at http://www.arbiter.wipo.int/domains/decisions/index-gtld.html.
[329] See http://www.arbiter.wipo.int/keywords/index.html.
[330] See paras.167 and 168 of the Report, athttp://wipo2.wipo.int/process1/report/index.html.
[331] The request was formulated in a letter from the Secretary of Communications, Information Technology and the Arts of the Australian Government, and was endorsed by Argentina, Australia, Canada, Denmark, France, the United States of America and the European Union. The text of the letter is to be found at http://wipo2.wipo.int/process2/rfc/letter.html.
[332] See WIPO documents WO/GA/26/3 and WO/GA/26/10.
[333] The Report is published on the WIPO website, at http://wipo2.wipo.int/process2/report/index.html.
[334] See http://ecommerce.wipo.int/domains/sct/documents/sct-s2-8.html.
[335] See also the Report of the Second WIPO Internet Domain Name Process (2001), supra note 292, at Chapter 3.
[336] Ibid. at Chapter 4.
[337] Geneva Convention for the Amelioration of the Condition of the Wounded and Sick in the Armed Forces in the Field of 12 August 1949, (GC I), Articles 53 and 54; Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of International Conflicts of 8 June 1977 (AP I), Articles 38(1), 85 (3)(f).
[338] The Delegation of the United States of America dissociated itself from this decision.
[339] See also the Report of the Second WIPO Internet Domain Name Process (2001), supra note 292, at Chapter 5.
[340] See also Ibid. at Chapter 6.
[341] Articles 22 and 23. See Report of the Second WIPO Internet Domain Name Process (2001), supra note 292 at paras.205-222.
[342] Special measures have been taken by ICANN for the protection of names of countries in the top-level domain .info; those measures are described in document SCT/S2/4 prepared by the International Bureau of WIPO (March 2002), in connection with the Special Sessions on the Report of the Second WIPO Internet Domain Name Process. That document is available at http://ecommerce.wipo.int/domains/sct/documents/index.html.
[343] These issues concern, in particular, (1) the list to be relied upon to identify the names of countries which would benefit from the protection envisaged, (2) the extension of the deadline for the notification to the Secretariat of names by which countries are commonly known, and (3) how to deal with acquired rights.
[344] See also the Report on the Second WIPO Internet Domain Name Process (2001), supra note 292, at Chapter 7.
[345] See the text of the request at http://wipo2.wipo.int/process2/rfc/letter2.html.
[346] See WIPO documents WO/GA/26/3 and WO/GA/26/10, para.26.
[347] The Conference program and the statements of the speakers are available on the WIPO site, at http://ecommerce.wipo.int/meetings/2001/cctlds/index.html.
[348] See the list of comments at http://ecommerce.wipo.int/domains/cctlds/comments/index.html.
[349] The WIPO ccTLD Best Practices for the Prevention and Resolution of Intellectual Propert Disputes are available at http://ecommerce.wipo.int/domains/cctlds/bestpractices/index.html.
[350] See http://www.domeinnaam.nl/live/.
[351] The ccTLD database is accessible on the WIPO site, at http://ecommerce.wipo.int/databases/cctld/index.html.
[352] The trademark database portal is accessible on the WIPO site at http://ecommerce.wipo.int/databases/trademark/output.html.
[353] The exclusive right is generally granted for a period of 20 years from the date of filing a patent application. See TRIPS Agreement, Article 33.
[354] A number of offices provide patent information on the Internet: for example, the United States Patent and Trademark Office (http://www.uspto.gov), the Japan Patent Office (http://www.jpo.go.jp), the European Patent Office (http://www.european-patent-office.org), the Canadian Intellectual Property Office (http://cipo.gc.ca) and the Industrial Property Information Center in Thailand (http://www.ipic.moc.go.th). For a discussion of WIPO's plans to make public international patent data available online, see Chapter VI(b)(i) (WIPOnet).
[355] The patent system thus encourages the dissemination and transfer of technological knowledge by granting a fixed-term market exclusivity to an inventor in return for the clear and complete disclosure of the invention. See TRIPS Agreement, Article 29.
[356] See generally, Reinier B. Bakels, "How to Find and Define Proper Boundaries for Patentability," Paper for the Workshop "Frontiers of Ownership in the Digital Economy" (June 10-11, 2002). See also presentations on "Business Method Patents" by: R. Stoll, Administrator for External Affairs, United States Patent and Trademark Office, U.S. Department of Commerce; Dariusz Szleper, Attorney, Paris Court of Appeal; and A. Christie, Visiting Professor, School of Law, Duke University: all given at the Second WIPO E-Commerce Conference (September 2001). See also Chapter III(a).
[357] State Street Bank & Trust v. Signature Financial Group, 47 USPQ 2d 1596 (CAFC 1998). See also AT&T Corp. v. Excel Communications, Inc., No. 98-1338, 1999, WL 216234, F.3d (Fed. Cir. Apr. 14, 1999), where the Court stated that "[the focus in determining whether an invention containing a computer algorithm recites patentable subject matter is] not on whether there is a mathematical algorithm at work, but on whether the algorithm-containing invention, as a whole, produces a tangible, useful, result." Following the decision in State Street Bank, the number of applications for business-method patents in the United States of America surged, including: Cybergold's "Attention Brokerage Scheme" (U.S. Patent No. 5,794,210); Amazon.com's "1-Click Ordering System" (U.S. Patent No. 5,960,411); and Priceline.com's "Reverse Auction System" (U.S. Patent No. 5,794,207).
[358] SOHEI Decision, T769/92, Decision of the EPO Board of Appeal (1992).
[359] The EPO Board of Appeal decided in favor of patentability because of "the particular significance of all the different files in the memory and the special manner in which by the different processing means or in the different processing steps the input data and the data stored are handled." See Thomas B. Koch, "Patenting e-Business Methods in Europe," International Internet Law Review, pp.43-46 (April 2001), at http://www.netlawreview.com.
[360] See, for example, Guidelines for Examination in the European Patent Office, Part C, Chapter IV, 1. General. According to the EPO, business inventions can be divided into three broad categories: (a) abstract business models (claims for a method of doing business in abstract) - to be rejected because they are methods of doing business "as such"; (b) computer-implemented business methods (claims which specify computers, computer networks or other conventional programmable digital apparatus for carrying out at least some of the steps of the business method) - to be treated in the same way as any other such method; and (c) other apparatus implemented business methods (claims which specify other apparatus, possibly in addition to computers, such as mobile telephones) - to be treated in the same way as other computer implementations: see http://www.european-patent-office.org/tws/appendix6.pdf.
[361] The Japan Patent Office has issued revised "Examination Guidelines for Computer Software Related Inventions," (December 28, 2000) (in Japanese) at http://www.jpo.go.jp/info/tt1212-045.htm. The revised Guidelines provide: (a) more case examples to enhance judgments on whether the business-related invention contains an inventive step; (b) specify that, in addition to "storage medium in which a computer program is recorded" (for applications filed on or after April 1, 1997), a "computer program" which was not recorded in any medium (for applications filed on or after January 10, 2001) shall be treated as "an invention of product"; and (c) "software" can be treated as an "invention" under Japanese Patent Law if the information processing using the software is actually embodied in hardware resources. For examples of business-method patent cases in Japan, see Toru Takano (2001), supra note 36, at pp.32-42.
[362] For example, improving the quality of search and examination of patent applications in this field and forming customer partnerships. See http://www.uspto.gov/web/menu/busmethp/index.html.
[363] See http://www.uspto.gov/web/menu/pbmethod/. See also "Business Methods Patent Initiative: An Action Plan," at http://www.uspto.gov/web/offices/com/sol/actionplan.html.
[364] The Trilateral Offices (European Patent Office, Japan Patent Office and United States Patent and Trademark Office) conducted a comparative study as regards business method related inventions, and produced a "Report on Comparative Study Carried Out under Trilateral Project B3b," for the Trilateral Technical Meeting (June 14-16, 2000) at http://www.uspto.gov/web/tws/b3b_start_page.htm.
[365] Decision of the United States Court of Appeals (vacating the District Court order) in, Amazon.com, Inc. v. Barnesandnoble.com, Inc. and Barnesandnoble.com, LLC, 239 F.3d 1343; 2001 U.S. App. LEXIS 2163; 57 U.S.P.Q.2D (BNA) 1747, February 14, 2001, Decided. Earlier decision of the United States District Court, granting plaintiff's motion for preliminary injunction in, Amazon.com, Inc. v. Barnesandnoble.com, Inc. and Barnesandnoble.com, LLC, 73 F. Supp. 2d 1228; 1999 U.S. Dist. LEXIS 18660 (W.D. Washington); 53 U.S.P.Q.2D (BNA) 1115, December 1, 1999, Decided. See also Matt Richtel, "Are Patents Good or Bad for Business On-Line," New York Times, Cyber Law Journal (August 28, 1998), at http://www.nytimes.com/library/tech/98/08/cyber/cyberlaw/28law.html.
[366] For a general overview on the issues raised by software patents at an international level, refer to Richard Poynder, "Patents and the Software Industry," United Kingdom Department of Trade and Industry and CSSA, at http://www.dti.gov.uk/cii/docs/psi.pdf. See also Dennis S. Karjala, "The Relative Roles of Patent and Copyright in the Protection of Computer Programs," 17 John Marshall Journal of Computer and Information Law, p.41 (Fall 1998).
[367] See Rodney Cruise, "A Report on Patent Protection on Software, e-Commerce and Business Methods," FICPI - Review of Patent Protection of Software, e-Commerce and Business Methods Based on Voluntary Responses From Delegates of FICPI Member Countries (2001).
[368] On September 1, 2002, Japan amended its Patent Law to expressly cover software. Section 2(3) of the Patent Law clarifies that: (i) a "thing" includes computer programs and (ii) "implementation" of an invention includes supplying software electronically. The amendment was intended to protect rightsholders against the transmission of patented programs without authorization via the Internet, see http://www.jpo.go.jp/.
[369] In 1996, the United States Patent and Trademark Office issued its Examination Guidelines for Computer-Related Inventions, 61 Fed. Reg. 7478 (1996), which indicate that if the practical use of an abstract idea is patentable, subject to the denial of protection to scientific principles, then its disembodied instruction (expressed on a tangible media) is patentable, because patents provide control over the making of an invention and a functionally descriptive computer instruction serves that purpose. The Japan Patent Office published, in 1997, the Implementing Guidelines for Inventions in Specific Fields, Chapter 1 of which contains examination guidelines for computer software related inventions.
[370] In re Beauregard, 53 F.3d 1583, 35 U.S.P.Q.2d 1383 (Fed. Cir. 1995). The Implementing Guidelines for Inventions in Specific Fields issued by the Japan Patent Office allow Beauregard-type claims. In Europe, the Board of Appeal of the European Patent Office noted that, in Decision T1173/97, "the Board is of the opinion that with regard to the exclusions under Article 52(2) and (3) EPC, it does not make any difference whether a computer program is claimed by itself or as a record on a carrier."
[371] In re Lowry, 32 F.3d 1579, 1583-84, 32 USPQ2d 1031, 1035 (Fed. Cir. 1994), involving a claim to data structure that increases computer efficiency held statutory.
[372] See, for example, "Training Materials for the Examination Guidelines for Computer-Related Inventions, Claim 13," issued by the United States Patent and Trademark Office (April 12, 1996).
[373] Proposal for a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions, February 2, 2002, COM(2002) 92 final, full text available. A description of the proposed Directive.
[374] Article 52 of the European Patent Convention (EPC) provides that "programs for computer as such" shall not be regarded as patentable inventions. As regards the practice of the European Patent Office, see supra note 370.
[375] In order to address some of these questions, Japan amended its Patent Law to expressly provide that an invention which was made publicly available online, for example, via the Internet, prior to the filing of an application would constitute a novelty defeating bar. It also confirmed that an invention that was publicly disclosed online would fall within the six-month grace period, providing an exception to novelty-destroying disclosures (see the Japanese Patent Law, as amended by Law No. 41 (May 1999)). In the United States of America, the "Manual of Patent Examining Procedure," §2128, issued by the United States Patent and Trademark Office, provides guidelines with respect to the status of electronic publications as prior art and Internet searching.
[376] "Results of the Questionnaires Concerning Disclosure of Information on the Internet and Other Issues Relating to the Internet," Document prepared by the International Bureau for the Standing Committee on the Law of Patents, Fifth Session, SCP/5/4 (May 14-19, 2001).
[377] State Street Bank & Trust v. Signature Financial Group, 47 USPQ 2d 1596 (CAFC 1998) (concerning U.S. Patent No. 5,193,056 (the "056 patent")).
[378] Documentation relating to the work of the Standing Committee on the Law of Patents may be found online.
[379] Information concerning disclosure of technical information on the Internet and its impact on patentability was collected by the International Bureau (see WIPO document SCP/4/5). Further, a survey was conducted to gather current national and regional practices in that respect; see WIPO document SCP/5/4.
[380] See WIPO document SCP/5/6, paras.180 to 182 (November 27, 2001), available at http://www.wipo.int/scp/en/documents/session_5/doc/scp5_6.doc.
[381] Texts of the PLT and the Regulations under the PLT are available at http://www.wipo.int/treaties/ip/plt/index.html.
[382] Further, the Diplomatic Conference adopted an Agreed Statement with a view to facilitating the implementation of Rule 8(1)(a) of the PLT, according to which the Diplomatic Conference requested the General Assembly of WIPO and the Contracting Parties of the PLT to provide the developing and least developed countries and countries in transition with additional technical assistance to meet their obligations under the PLT. It further urged industrialized market economy countries to provide, on request and on mutually agreed terms and conditions, technical and financial cooperation in favor of developing and least developed countries and countries in transition. Texts of the PLT and the Regulations under the PLT, as well as the Agreed Statements are available at http://www.wipo.int/treaties/ip/plt/index.html.
[383] The further harmonization of substantive issues of patent law has been discussed since the fourth session of the SCP in November 2000. Working documents of these sessions are available on the WIPO website, at http://www.wipo.int
