I

I. PRACTICES VIOLATING THE TRIPS AGREEMENT

The Special 301 process is aimed at identifying those "acts, policies or practices" of foreign governments that have the effect of denying U.S. copyright owners adequate and effective protection for their intellectual property, or fair and equitable access to the market in question.¹ Since January 1, 1996, when the WTO Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement entered into force, the substantive and enforcement obligations defined by TRIPS have provided a leading globally accepted minimum benchmark for identifying inadequacy or ineffectiveness of IPR protection.² Accordingly, beginning with its 1996 Special 301 submission, IIPA has identified, in a separate section, certain U.S. trading partners whose copyright regimes fail to meet the minimum standards of protection and/or enforcement required by the TRIPS agreement. While this is not an exhaustive list, and TRIPS compliance issues are discussed in many of the individual country reports in this submission, this section highlights many of the countries whose bilateral trade policy discussions with the United States should have TRIPS compliance at the forefront.

On January 1, 1996 the WTO TRIPS agreement entered into force for the U. S. and for all other WTO members that do not qualify for, and take advantage of, the transition periods of four and ten years.³ Countries that were not charter members of WTO but which joined it subsequently are generally required, by the terms of their WTO accession protocols, to be in full compliance with TRIPS by the date of their accession, without resort to any transitional period contained in the TRIPS text. Even for WTO members that do qualify for a transition period, the national treatment and MFN provisions of TRIPS apply fully as of January 1, 1996. This submission includes some countries that claim transition periods as developing countries but that are, in IIPA/s judgement not be properly entitled to do so.

Full TRIPS compliance is also a crucial goal for developing countries that are entitled to transition periods. Most of these countries are obligated to be in full compliance with TRIPS requirements on January 1, 2000, less than 700 days from the date of this submission. These countries cannot wait until the year 2000, or even until 1999, to begin revising their laws or improving their enforcement systems. This job must begin immediately. Driving home the urgency of immediate action to achieve TRIPS compliance by January 1, 2000, should be a central focus of U.S. bilateral trade discussions with these developing countries during 1998.

Some countries listed in IIPA’s 1997 Priority Practices section for TRIPS compliance problems no longer appear in this section of this year’s submission. For example, during the past year Hong Kong and Luxembourg have enacted substantially revised copyright laws that cure many of the TRIPS shortcomings noted in last year’s submission. Judicial practices in Japan and Germany have reflected a greater willingness to issue ex parte civil search orders in appropriate infringement cases, as required by TRIPS Article 50. Ecuador’s attempt to delay its implementation of TRIPS, in contradiction to its WTO accession protocol, resulted in the U.S. government threatening to bring a dispute settlement case before the WTO, and elevating Ecuador to the Special 301 Priority Watch List. In July 1997, Ecuador reconsidered its position, and agreed to implement the TRIPS Agreement without taking advantage of the transition period, although to date it still has not implemented TRIPS-consistent copyright legislation. Further details on some of these countries can be found in the individual country reports contained in this submission.

The following countries, listed in alphabetical order, head the list of those whose copyright law and/or enforcement regimes do not meet the minimum obligations in the TRIPS agreement. As noted above, this list is not exhaustive, either as to countries or as to problematic issues of TRIPS compliance.

Austria

Section 56d(1) of the 1996 Amendment Act states that "tourist establishments" (of which there are over 1,500 in Austria) may publicly perform cinematographic works (or other audiovisual works, including videos) for their guests in exchange for remuneration to the right holders but without their authorization. Lodgings would include hotels, motels, inns and bed-and-breakfast lodgings. Such public performance would be possible only after at least two years have passed since a film’s theatrical exhibition.

This compulsory license violates Article 14bis(1) and 14(1)(ii) of the Berne Convention which grants the owners of copyright in a cinematographic work with an exclusive public performance right. Section 18 of Austria’s Federal Copyright Act also grants this right. The substantive obligations of the Berne Convention are incorporated into the TRIPS agreement in Article 9 of TRIPS. The Austrian government should repeal this provision since it violates its TRIPS obligations.

Other questions raised regarding whether Austria’s substantive copyright law regime may violate its TRIPS obligations include:

· whether Austria applies the "rule of the shorter term" to foreign sound recordings with respect to the right of reproduction in violation of Article 3 and 4 of TRIPS (national treatment/MFN). None of the national treatment/MFN exceptions in TRIPS would apply in this case;

· whether Austrian law ensures that record and film producers, and U.S. performers, with respect to the audio and video levies, receive the national treatment to which they are entitled under Article 3 and 14.1 of TRIPS;

· whether Austria provides for full retroactive protection consistent with Article 18 of Berne and Article 14.6 of TRIPS; and

· whether Austria provides "direct and indirect" reproduction rights so as to provide an exclusive right to phonogram producers with respect to subscription and interactive services.

Bulgaria⁴

As an accession member of WTO, Bulgaria’s TRIPS obligations became fully effective on December 1, 1996. While Bulgaria’s substantive copyright law protections contain some clear deficiencies in terms of TRIPS compliance—for example, contrary to TRIPS Article 14.4, Bulgaria does not recognize an exclusive rental right for the producers of sound recordings—the more significant problems concern compliance with the TRIPS enforcement text. Bulgaria’s enforcement laws as written, and its actual enforcement practices, fail to meet TRIPS standards in a number of respects, including the following:

· Contrary to TRIPS Articles 41 and 61, civil, administrative and criminal remedies are not effective to prevent or deter infringements. Criminal and administrative fines, though recently increased to a maximum of $2,770 and $2,900, respectively, for repeat offenders, are still much too low to deter commercial pirates. In any event, only a handful of criminal cases has ever even been initiated against the widespread piracy of sound recordings or computer programs, and no criminal copyright infringement case has ever resulted in a final decision imposing any penalties whatsoever. This is true despite the export of millions of units of CDs causing losses to the U.S. recording industry of $120 million in 1997. Bulgaria’s total failure to impose deterrent penalties on the offending CD plants is a clear violation of these Articles of TRIPs.

· Contrary to TRIPS Article 41.1, Bulgarian copyright enforcement procedures do not "permit effective action against any act of infringement." Neither the title verification requirements, nor the compulsory use of secure identification (SID) codes in optical media production facilities, is effective as implemented, due to a lack of enforcement and the nominal penalties available for non-compliance ($23 and $4, respectively). The new CD plant licensing decree is likely to be similarly ineffective unless substantially amended, and the new requirement to place holograms on blank recording media will weaken, not strengthen, anti-piracy efforts.

· Contrary to TRIPS Articles 41 and 46, Bulgarian enforcement practices do not include the confiscation and forfeiture of equipment predominantly used for the purpose of making pirate sound recordings or computer programs.

· Contrary to TRIPS Articles 41 and 50, Bulgaria fails to provide effective provisional remedies to prevent infringement and preserve evidence, and criminal raids are not organized or executed in an effective manner.

· Contrary to TRIPS Articles 41.2 and 61, criminal copyright cases in Bulgaria are plagued by a recurrent pattern of unwarranted delays at every stage of the investigative and prosecution process.

Canada

In April, 1997, Canada enacted an extensive revision of its Copyright Act. The legislation includes several highly objectionable provisions that are—or, when they are brought into force, will be—inconsistent with Canada’s obligations both under TRIPS and under the North American Free Trade Agreement (NAFTA).⁵ These include:

· The new legislation establishes a levy on blank audio recording media from which authors and performers of musical works, and producers of sound recordings, may draw an equitable remuneration for private copying of their works or recordings. While Canadians are automatically eligible to receive the producers’ or performers’ share of this levy, foreigners can only participate on the basis of reciprocity. Since U.S. law has no comparable levy, U.S. recording companies and performers are not eligible to draw from the Canadian levy. This discrimination against U.S. right holders violates Articles 3 and 4 of the TRIPS Agreement as well as Article 1703 of NAFTA. These provisions of the Canadian legislation have not yet been proclaimed into force by the Governor General, but such implementation could come as early as this spring.

^·The legislation establishes a right of remuneration for telecommunication of sound recordings to the public. By substituting a right of remuneration for the producers’ exclusive "right to authorize or prohibit the direct or indirect reproduction of their phonograms," this provision is objectionable under Article 14.2 of TRIPS and Article 1706.1 of NAFTA to the extent it is applied to on-demand or interactive digital services, in which sound recordings are telecommunicated to the public in a way that necessitates the making of reproductions in the telecommunication process and that facilitates the making of reproductions by end-users. Furthermore, the right of remuneration generally applies only to recordings fixed within, or by nationals of, Canada or a country belonging to the Rome Convention. Since the U.S. does not belong to Rome, U.S. producers would be denied the remuneration available to Canadian producers, a blatant violation of Articles 3 and 4 of TRIPS and of Article 1703 of NAFTA.⁶

Denmark

On April 30, 1997, Ambassador Barshefsky announced that USTR would initiate WTO dispute settlement proceedings against Denmark for its failure to provide provisional relief in civil enforcement proceedings, as required by TRIPS Article 50. Subsequently, consultations with the Danish government were initiated as the first step in the dispute settlement process. The Danish position—that Article 50 of TRIPS does not require it to implement an inaudita altera parte remedy in its civil procedure—denies right holders an essential enforcement tool, particularly with respect to corporate end-user piracy of protected computer programs. Attached as Appendix A to this Priority Practices section of this submission is an analysis of Article 50 and related provisions demonstrating conclusively, in our view, that this Article must be made available in civil cases for a country to remain in compliance with its TRIPS obligations.

Greece⁷

With its TRIPS obligations effective January 1, 1996, the Greek government has yet to take effective action against high levels of piracy, particularly TV piracy where the piracy rate is at or above 50%, the highest in Europe. In particular, Greece has failed to provide expeditious remedies to prevent infringements, and to apply penalties sufficient to deter further infringements. It continues to be difficult to secure prosecutions, convictions, or adequate sentencing in the Greek judicial system. In particular, the Greek government has not yet dealt effectively with the many pirate TV stations that continue to broadcast unauthorized U.S. features and TV programs. Losses from piracy in Greece exceed $100 million annually and piracy levels are an unacceptable 25% of the market in the audio and video area and exceed 70% in the entertainment and business software areas. Collectively, these represent the highest piracy rates in the EU and warrant grave concern over Greece’s compliance with its TRIPS enforcement obligations.

While the principal focus of IIPA’s and its member MPA has been to focus on TV piracy as the major TRIPs problem, IIPA has identified the following areas of Greece’s copyright enforcement regime which cut across all industry and product areas and which give rise to questions about the degree of its fulfillment of TRIPS obligations beyond just TV piracy:

· Criminal Procedures -- Articles 61 and 41

(a) Deterrent Penalties Are Not Applied

The Greek copyright law contains some of the toughest criminal penalties provisions in the EU, with penalties ranging as high as 5 to 10 years in jail and 5 million to 20 million drachmas (US$17,500 to US$70,000) in fines if the infringer is acting professionally or is particularly dangerous. The problem in Greece is that these significant penalties are not being imposed. Indeed, the courts even ignore the statutory minimum penalties.

Under general provisions of Greek criminal law, jail terms of up to two years may be "bought out" by converting them to fines. These provisions are routinely applied to keep pirates out of jail. Indeed, the "buy out" system (which requires only a minimal $5 per day payment, though the judge has the discretion to raise it up to $53), along with the propensity of Greek courts to impose only minimum sentences and to suspend any sentence to imprisonment that is imposed in these cases, mean that, to date, no pirate of a U.S. copyright has yet served time in jail. This must change if there is to be real deterrence in the Greek enforcement system. This system operates even less effectively in the area of TV piracy. To date, while there have been a few fines imposed both by the courts and by the NRTC, which regulates broadcasting, no TV pirate has paid these fines. Indeed, the NRTC is owed over $18 million by TV stations.

In conclusion, even though criminal penalties under Greek law are high, they are not actually being imposed and, in our view, are therefore not "sufficient to provide a deterrent" to copyright infringement (TRIPS Article 61).

(b) Unwarranted Delays in Criminal Cases

Prosecutors, especially at the local level, are often reluctant to pursue intellectual property cases. This reluctance has been especially evident in the motion picture anti-piracy area where, despite vigorous industry efforts, there has been great difficulty in bringing cases against TV pirates and video pirates. The recording and software industries also report delays in bringing simple piracy cases to resolution in the Greek courts.

· Civil and Administrative Procedures and Remedies -- Articles 41-49

(a) Unwarranted Delays in Civil Cases -- Article 41.2

Civil infringement cases take a long time in Greece, at least a minimum average of three years. According to local counsel, it is not unusual for civil cases to be pending for more than five to six years before the First Instance Court. If the case is appealed, a decision is usually obtained in another two-three years. This delay is due, in part, to the frequency of adjournments in cases, lawyers' strikes, the massive number of cases brought before the courts, and few judges sitting on the bench. These delays in conducting and concluding civil copyright infringements cases constitute "unwarranted delays" under TRIPS.

(b) Discovery -- Article 41.1

While it is possible to discover documents in both civil and criminal cases which would prove infringement, it apparently is not possible to discover certain other business records which would indicate the scope of a pirate's profits, in either civil or criminal cases. For example, plaintiffs apparently cannot obtain discovery of documents that would prove the scale of infringement or scope of profit in a software distribution cases—such as records of how many computers a hard-disk loader has sold. Plaintiffs may, however, discover records if they are relevant to whether an infringement has occurred (such as licenses or invoices for the purchase of software.) The Greek government's failure to afford discovery for certain business records (for example, those which would go toward showing the scope or scale of infringement) in both civil and criminal cases does not appear to satisfy the TRIPS standard to afford "expeditious remedies to prevent infringements and remedies which would constitute a deterrent to further infringements."

(c) Expenses and Attorneys' Fees -- Articles 45 and 41

A successful plaintiff can obtain court costs, but these are very low. Greek law does not allow for the recovery of investigational costs, like search costs and expert's fees. Judges do have the discretion to include attorneys' fees as court costs; these fees are calculated by the minimum standards fixed by the Code of Attorney's Fees and hardly come close to full compensation for legal services provided. It is questionable whether this practice of awarding expenses is "adequate to compensate" rights holders (TRIPS Article 45.2) and whether it "constitutes a deterrent to further infringements" (TRIPS Article 41).

· Provisional Measures -- Articles 41 and 50

(a) Inaudita Altera Parte Searches -- Article 50

The copyright law, along with the Code of Civil Procedure, permits courts to order ex parte seizures without prior notice to the defendant in urgent cases or in cases involving a direct or imminent risk. Recently, BSA has been more successful than in the past in obtaining ex parte civil search orders to search corporate offices, training centers and resellers for evidence of suspected use or distribution of illegal software. In particular, time-sensitive orders such as preliminary injunctions and ex parte authorizations for searches of suspected infringers have been difficult to obtain. Courts still sometimes require that the defendant be given prior notice of the search. Greek practice must be closely monitored to ensure that it fully complies with TRIPS Article 50, which requires that courts issue ex parte search orders in a timely manner where "any delay is likely to cause irreparable harm" or "where there is a demonstrable risk of evidence being destroyed." Those conducting the search must be empowered to seize not only pirated products, but also business records constituting evidence of the scope, extent and nature of piratical activity.

· Border Measures -- Articles 41 and 51-60

The Greek border control system is less than effective. While there have been some seizures of Bulgarian CDs at the Greek border, such shipments continue at high and rising levels and pirate Bulgarian product is then routinely reexported to Italy and other European destinations.

The Greek enforcement system requires substantial improvement and this must emanate from the highest levels of the Greek government. At this stage, the deficiencies outlined here place Greece in violation of its enforcement obligations under TRIPS.

Ireland

Ireland is one of the few EU members that has not undertaken a comprehensive reform of its copyright law to bring it fully up to modern standards. While Ireland has adopted the EU Software and Duration Directive, it is not yet a member of the Berne 1971 text and its statutory regime is not in compliance with TRIPS in a number of important respects. These include:

· no rental rights in sound recordings in violation of TRIPS Article 14.4.

· apparently, no protection for compilations of data in violation of TRIPS Article 10.2.

· failure to provide adequate presumptions on subsistence and ownership of copyright in violation of Articles 15.1 and 15.2 of the Berne Convention, incorporated in TRIPS Article 9, which make enforcement procedures unnecessarily complicated or costly, in contravention of TRIPS Article 41.2.

· practical unavailability of deterrent criminal penalties without unreasonable delays, as well as the weakest maximum penalties for criminal copyright infringement in Western Europe (a maximum fine of US$1460, and a six-month jail term that can only be imposed upon a repeat offender), in violation of TRIPS Articles 41 and 61.

· failure to provide expeditious preventive remedies in criminal cases (TRIPS Article 41.1), or to provide for seizure, forfeiture and destruction of instrumentalities of piracy (TRIPS Article 61), in light of court decisions compromising the effectiveness of criminal raids against video pirates.

· requiring right holders to prove actual knowledge by the defendant that he/she/it actually knew that the act in question was infringing. This onerous and burdensome requirement exists in no developed country and violates TRIPS Article 41.

· while Ireland claims to provide a civil remedy for bootlegging, this should be clarified in the amendments. Ireland still fails to provide this civil remedy in the context of present acts involving performances that took place before 1968, e.g., there is no retroactive protection in violation of TRIPS Article 14.6.

The U.S. commenced a TRIPS case against Ireland for the deficiencies in its law and has sought immediate amendments to bring the Irish law into compliance. It is our understanding that Ireland will be undertaking its amendment process in two steps: the first to correct the most egregious violations in the next few months, followed by comprehensive legislative reform to correct the remaining deficiencies by the end of 1998.

Israel⁸

Israel has not undertaken comprehensive revision of its law for many years and still operates under the U.K Act of 1911, as amended from time to time. Areas of the Israeli copyright law that may violate TRIPS obligations include:

· no rental right for computer programs in violation of TRIPS Article 11.

· no protection for U.S. performers to control the fixation of their unfixed performances in violation of TRIPS Article 14.1 and TRIPS Article 3 and 4.

· short term of protection for performers (25 years) in violation of TRIPS Article 14.5.

· whether Israel applies the "rule of the shorter term" to sound recordings in violation of national treatment and TRIPS Article 3.

· failure of Israeli courts to assess deterrent and fully compensatory damages in civil infringement cases, in violation of TRIPS Articles 41 and 45.

· reluctance to invoke criminal procedures against commercial pirates, and failure to impose deterrent penalties upon criminal conviction, in violation of TRIPS Articles 41 and 61.

Israel has taken the position that its failure to bring its copyright regime into compliance with TRIPS is excused by virtue of the transition period of four years allowed "developing" countries under TRIPS Article 65. However, Israel is not entitled to claim developing country status under any reasonable standard. Israel’s estimated per capita GDP in 1995 was $15,500, far higher than that of developed countries like Greece ($9,500) and Spain ($14,300).⁹ Israel’s developing country status should be challenged and its law brought up to TRIPS standards immediately, as required of all developed country WTO members.

Singapore¹⁰

Since the WTO TRIPS Agreement was signed in 1994, Singapore has steadfastly refused to acknowledge any obligation to bring its law into compliance with TRIPS by January 1, 1996. It has consistently claimed to be a developing country entitled to a transition period until January 1, 2000, under TRIPS Article 65. While this assertion seems to lack any credible factual basis¹¹, it has allowed Singapore to avoid any meaningful reform of its 11-year-old Copyright Act, even as its neighbors were updating their statutes to meet new international norms.

Finally, in the first six weeks of 1998, Singapore tabled, and on February 19 enacted, an extensive amendment of its Copyright Act, which brings Singapore’s law substantially closer to full compliance with TRIPS, particularly with regard to rental rights in computer programs and sound recordings; performers’ rights; border controls; and enforcement provisions on forfeiture of equipment used in the production of pirate books and software, and on the seizure of documentary evidence of piracy pursuant to a search warrant.

Unfortunately, the amendment does not fully achieve TRIPS compliance in all the areas it addresses. For example, it includes grandfathering exceptions on rental rights that are not consistent with TRIPS. The amended law also lacks criminal penalties against the traffic in bootleg recordings, a serious flaw that violates Singapore’s TRIPS Article 61 obligation to make criminal enforcement available against all types of "piracy on a commercial scale." Additionally, the recent amendment fails to address a number of other areas in which Singapore’s current law falls well short of TRIPS standards. These include:

· a compulsory licensing system under which foreign works can be translated, and/or reprinted in Singapore-only editions, without the permission of the copyright owner, in a manner inconsistent with the relevant provisions of the Berne Convention.

· broad exceptions allowing (without permission of the right holder) copying by libraries; copying and distribution by educational institutions; copying by individuals for "private and domestic use"; and any use by government officials, or by private parties they designate as acting "in the service of the government," all without reference to the TRIPS Article 13 requirement that exceptions must neither conflict with a normal exploitation of protected material nor unreasonably prejudice the legitimate interests of the right holder.

· burdensome allocation of evidentiary burdens in civil enforcement litigation that require right holders to offer extensive proof of subsistence and ownership of copyright, and of the country in which piratical imported material was manufactured, in contravention of Article 15 of the Berne Convention, incorporated into TRIPS Article 9.1 and of Articles 41.2 and 42 et seq. of TRIPS.

· failure to provide the same rights for motion pictures as for other copyrighted works, or to provide full terms of protection for copyrighted works included in motion pictures, as required by provisions of the Berne Convention that are incorporated in Article 9.1 of TRIPS.

Disturbingly, the enacted amendment bill exacerbates some of the current law’s TRIPS shortcomings, and creates some new ones, by placing industrial, commercial or corporate research on the same footing as scientific or scholarly research for the purpose of applying the library copying or "fair dealing" exceptions, or for issuing compulsory licenses for translation or reprinting. This huge expansion of exceptions that, in most cases, were already overbroad could have a particularly devastating impact on journal and book publishers; their works would now be vulnerable to greatly increased unauthorized and uncompensated copying and use by commercial establishments as well as by scholars and scientists.

South Africa¹²

Like Singapore, recent amendments to the copyright law in South Africa (the Intellectual Property Laws Amendment Act, effective October 1, 1997) have brought that country closer to compliance with its TRIPS obligations, in areas such as the scope of protection given to computer programs, protection of compilations of data and databases; and terms of protection for audio-visual works. However, even after these amendments, South Africa’s law contains some incompatibilities with WTO/TRIPS substantive standards, and in numerous areas South Africa’s enforcement practices fall short of full TRIPS compliance.

One TRIPS violation that has an extremely detrimental effect on the enforcement of individual copyright claims in South Africa is the lack of evidentiary presumptions in the law (making "[p]rocedures concerning the enforcement" of copyright "unnecessarily complicated" and "costly" and imposing "unwarranted delays" on right holders, in violation of Berne Article 15, incorporated in TRIPS Article 9.1, and TRIPS Article 41.2). Whereas in certain Commonwealth countries, ownership by the plaintiff is presumed unless proof to the contrary is introduced by the defendant, in South Africa, mere denial by the defendant shifts the burden to prove ownership to the plaintiff. As a result, the defendant in a copyright infringement case can and often does—without any supporting evidence—call into question the subsistence of copyright in a work, as well as the plaintiff’s ownership of that copyright. This defect in South African law can dissuade plaintiffs with actionable claims from going forward with their cases, given how easy it is for defendants in even very small cases to shift the burden of proof and impose onerous proof requirements on right-holders.

The other major TRIPS problem is the extreme difficulty right holders have had in obtaining ex parte civil search ("Anton Piller") orders (violating TRIPS Article 50). It is possible to obtain an ex parte civil search order in South Africa by proving: (1) copyright ownership in the work being infringed; (2) actual infringement; and (3) that evidence would likely be destroyed if the right holder cannot obtain a civil ex parte search order. The process of obtaining an Anton Piller ex parte civil search order is made onerous by the lack of an evidentiary presumption of copyright ownership in the Copyright Law. Although such orders are essential to preserving evidence of illegal copying of software and therefore to successful pursuit of civil infringement suits, companies have rarely been granted these search orders in South Africa because of the great expense and very high evidentiary threshold associated with obtaining them.

Other examples of continued TRIPS deficiencies include the following:

· full protection is not afforded to foreign pre-existing works, sound recordings and performances in South Africa, as required by Article 18 of the Berne Convention (incorporated in Article 9.1 of TRIPS) and by Article 14.6 of TRIPS.

· the current law provides only a 20-year term of protection to performers in their performances; this must be expanded to at least 50 years to comply with Article 14.5 of TRIPS.

· some exceptions to protection are overly broad, and must be amended to comply with the standards of TRIPS Article 13.

· civil damages in software copyright infringement cases are too low to achieve deterrence or full compensation, as required by Articles 41 and 45 of TRIPS.

· the criminal enforcement required (by Article 61 of TRIPS) to be available is hampered by the failure to impose deterrent penalties, by unwarranted delays in criminal prosecutions, and by recurring questions about the authority of the South African Police Service (SAPS) to conduct criminal raids and seizures under the Copyright Act.

South Korea

South Korea is currently in violation of its obligations under the TRIPS agreement to protect pre-existing works and sound recordings (Berne Article 18 and TRIPS Article 14.6). These articles require that existing works and sound recordings which were not previously protected in Korea (or whose term of protection in Korea has not expired) must be protected retroactively for the full term of protection (50 years or life plus 50 years) if the work or sound recording has not fallen into the public domain in the country of origin through the expiration of the term of protection. In the Uruguay Round Agreements Act, the U.S. extended full protection to foreign works and sound recordings that fell into this class. South Korea has not properly done so, however.

Legislation recently adopted in South Korea only protects works, whose term is measured from publication, and sound recordings back to 1957, rather than back to 1948, as would be required in order to afford all affected works a full Berne/TRIPS term of protection. For other works whose term is measured by the life of the author, foreign works whose authors died before 1957 will remain totally unprotected in South Korea.

South Korea’s transition rules also fail to comply with TRIPS. For example, producers of pre-1995 derivative works (e.g., translations) of newly protected foreign works may continue to reproduce and sell those works until the end of 1999 without paying any compensation to the owner of the restored work. This is incompatible with the transition rules contained in Article 18(3) of Berne which would permit continued exploitation but only on payment of compensation to the right holder.

South Korea’s position with regard to protection of pre-existing works and sound recordings is virtually indistinguishable from the position taken by Japan with respect to pre-1971 sound recordings, up until the time that the United States (later seconded by the EU) invoked the WTO dispute settlement process to challenge this clear violation of Japan’s TRIPS obligations. Japan ultimately amended its law to come into full compliance with TRIPS. South Korea should do the same, by providing a full term of protection to works and sound recordings dating from 1948 or later, and works by authors who died in 1948 or thereafter, as the case may be.¹³

To the extent that South Korea seeks to excuse this clear deficiency, in part, by claiming that it is a developing country and therefore entitled to the four year transition period provided in TRIPS Article 65.2, its claim is without merit.¹⁴ Korea's compliance with this obligation dates from January 1, 1996, and is now more than two years overdue.

Sweden

On April 30, 1997, Ambassador Barshefsky announced that USTR would initiate WTO dispute settlement proceedings against Sweden for its failure to provide provisional relief in civil enforcement proceedings, as required by TRIPS Article 50. Subsequently, consultations with the Swedish government were initiated as the first step in the dispute settlement process. The Swedish position—that Article 50 does not require it to implement an inaudita altera parte remedy in its civil procedure—denies right holders an essential enforcement tool, particularly with respect to corporate end-user piracy of protected computer programs. Attached as Appendix A to this Priority Practices section of this submission is an analysis of Article 50 and related provisions demonstrating conclusively, in our view, that this Article must be made available in civil cases for a country to remain in compliance with its TRIPS obligations.