(1) Performers shall enjoy the exclusive right of authorizing the making available to the public of the original and copies of their

Alternative A: musical performances fixed in phonograms

Alternative B: performances fixed in any medium

through sale or other transfer of ownership.

(2) A Contracting Party may provide that the right provided for in paragraph (1) does not apply to distribution after the first sale or other transfer of ownership of the original or copies of performances by or pursuant to an authorization.

10.01 The Rome Convention does not contain any provisions on the rental of copies of fixed performances or phonograms.

10.02 Article 10 provides performers with the exclusive right to authorize rental of the original and copies of their fixed performances. The rental of phonograms has been defined in Article 2.

10.03 Paragraph (1) contains another presentation of the "2.11 alternatives". According to Alternative A, the right of rental would apply only to musical performances fixed in phonograms, whereas Alternative B would cover all performances fixed in any medium.

10.04 Paragraph (2) contains a clause permitting Contracting Parties to maintain, for a limited period of time, any systems they may have for providing equitable remuneration to performers for the rental of copies. This clause has been modelled on Article 14.4 of the TRIPS Agreement. According to the TRIPS Agreement, Members "may maintain such systems provided that the commercial rental of phonograms is not giving rise to the material impairment of the exclusive rights of reproduction of right holders". Contracting Parties that, on April 15, 1994, had and continue to have such systems may maintain them; however, instead of leaving this possibility open for an indefinite period of time, a three-year time limit is proposed, beginning from the entry into force of the proposed Treaty.

10.05 The performers' right of rental in respect of their fixed performances was included in the proposals submitted for the February 1996 session of the Committees of Experts by Argentina, Brazil, the European Community and its Member States, Japan, the Sudan, the United States of America, and Uruguay. Japan confined its proposals to the rental of phonograms, and the United States of America confined its proposals to phonograms and musical performers only.

10.06 Article 17 contains provisions concerning the right of rental of producers of phonograms; it corresponds closely to this Article. The Notes on Article 17 concerning comparable elements are parallel to those above.

(1) Performers shall enjoy the exclusive right of authorizing the rental of the original and copies of their

Alternative A: musical performances fixed in phonograms,

Alternative B: performances fixed in any medium,

even after distribution of them by or pursuant to authorization by the performer.

(2) Notwithstanding the provisions of paragraph (1), a Contracting Party that, on April 15, 1994, had and continues to have in force a system of equitable remuneration of performers for the rental of copies of their phonograms, may maintain that system for a period of 3 years from the entry into force of this Treaty.

11.01 Article 11 introduces a new right for performers: the exclusive right of making their fixed performances available to the public. Article 11 is based on the May 1996 proposal made by the European Community and its Member States.

11.02 The proposed new right covers the making available of fixed performances by wire or wireless means. A distinction is thus made between the distribution of copies of fixed performances in physical, tangible form, which is covered by the right of distribution under Article 9, and the making available of fixed performances by transmission.

11.03 The right of making available is limited to situations where members of public may access fixed performances from a place and at a time individually chosen by them. Thus, availability is based on interactivity and on on-demand access.

11.04 The proposed new right is designed to operate as a basic rule for the proper functioning of the electronic marketplace. The electronic or digital "record shop" can be compared to a record manufacturing plant or a CD factory. The functions of the manufacturing and distribution portions of the music industry and retail record shops may be replaced by a database open to the public for the direct delivery of music productions via communication networks to home computers.

11.05 The exclusive right laid down in Article 11 covers the making available of fixed performances through systems that permit direct access to a certain performance stored in a database. The expressions "may access" and "from a place and at a time individually chosen" cover directly all situations that are interactive.

11.06 There are, however, systems and services based on particular technical arrangements and programming structures which make it possible to access the fixed performances provided by the service without such access being fully interactive. Such services are offered on a subscription basis. From the point of view of the members of the public these services are "near to interactive". In many cases the only difference between interactive and "near to interactive" is in the time required for access. For both members of the public and rightholders, the shorter the delay, the closer the effect of such practices is to those of services that enable immediate access. The volume of protected subject matter that may be offered to the public in this way, combined with the fact that it may be made available through a number of parallel channels may add significantly to the ease of access. As the technical capacity of storage devices and communication networks grows these services are likely to develop further. They can be established by using cable or wire networks or by wireless means.

11.07 Practices described in the preceding Note could conflict with the normal exploitation of fixed performances and unreasonably prejudice the legitimate interests of rightholders. Single channels offered on a subscription basis without being part of such services do not have these effects.

11.08 The proposed right of making available of fixed performances in Article 11 is intended to cover both directly interactive ways of making available and services with similar effects, as described above. Both types of service fulfil the criteria laid down in Article 11 since members of the public may access fixed performances from a place and at a time individually chosen by theme.

11.09 The right proposed in Article 11 is an exclusive right. This is fundamental.

11.10 Article 11 contains another presentation of the "2.11 alternatives". According to Alternative A the right of making available would apply only to musical performances fixed in phonograms, whereas Alternative B would cover all performances fixed in any medium.

11.11 It is strongly emphasized that Article 11 does not attempt to define the nature or extent of liability on a national level. The proposed international agreement determines only the scope of the exclusive rights that shall be granted to performers in respect of their fixed performances. The question of who shall be liable for the violation of these rights and what the extent of liability shall be for such violations is a matter for national legislation and case law according to the legal traditions of each Contracting Party.

11.12 Proposals concerning digital transmission were presented for the February 1996 session of the Committees of Experts by Argentina, the United States of America, and Uruguay. The group of countries of Latin America and the Caribbean considered that an exclusive right of digital transmission might be adopted by national legislation as a form of communication to the public or as a right of distribution by transmission. The European Community and its Member States made a proposal on this issue for the May 1996 session of the Committees of Experts.

11.13 Article 18 contains provisions concerning the right of making available of producers of phonograms; it corresponds closely to this Article. The Notes on Article 18 concerning comparable elements are parallel to those above.

Performers shall enjoy the exclusive right of authorizing the making available of their

Alternative A: musical performances fixed in phonograms,

Alternative B: performances fixed in any medium,

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.

12.01 Article 12 of the Rome Convention grants to performers and to producers of phonograms the right to a single equitable remuneration if their phonogram is published for commercial purposes or if a reproduction of the phonogram is used for broadcasting or any communication to the public. The remuneration is paid by the user to the performer or to the producer of the phonogram or to both. In the absence of an agreement between these parties, national legislation may lay down the rules that govern the sharing of this remuneration.

12.02 The right to remuneration is subject to the reservations permitted in Article 16 of the Rome Convention. Under Article 16, any state may declare that it will not apply the provisions of that Article or that it will not apply them in respect of certain uses. Furthermore, a state may declare that it will not apply the right to remuneration in respect of phonograms the producer of which is not a national of another Contracting State. A Contracting State may also make the right to remuneration subject to reciprocity as regards the extent to which, and the term for which, another state grants protection to phonograms fixed by a national of the state making such a reservation.

12.03 Article 12 of the proposed Treaty accords to performers a right to equitable remuneration for the use of phonograms (in which their performances are fixed) published for commercial purposes or the use of a reproduction of such phonograms for broadcasting or any communication to the public. In general, this right corresponds to the right provided for in Article 12 of the Rome Convention.

12.04 Paragraph (1) does, however, propose additional elements that are not included in Article 12 of the Rome Convention. The right to remuneration would cover not only direct uses of phonograms but also indirect uses for broadcasting or for communication to the public. Remuneration should always be received both by performers and producers. In this way, the proposed Article 12 excludes the possibility that performers would not receive at least a single equitable remuneration.

12.05 "Broadcasting" and "communication" are defined in Article 2. The definition of broadcasting covers rebroadcasting as discussed in Note 2.23 above. Communication covers all cases of cable or wire transmission, such as cable-originated television transmissions and sound radio by cable or in communication networks. Because the right covers both direct and indirect uses of phonograms, all forms of retransmission by cable and wire also fall within the scope of the right. The definition of communication also covers situations where a phonogram is played directly to the public present at the same location. Indirect communication of a phonogram covers situations where a radio or television set or other apparatus is used to make a phonogram that is included in a broadcast or wire communication audible to the public in a cafe, restaurant, hotel lobby or other place that is open to the public.

12.06 Paragraph (2) permits Contracting Parties to establish rules governing the way in which remuneration is shared between performers and producers of phonograms and the way in which users pay the required remuneration. These are logistical concerns that are beyond the scope of international agreements.

12.07 As noted above, the right to remuneration under the Rome Convention is subject to reservations. This basic structure has been reproduced in the proposed Treaty. The reservations clause in paragraph (3) leaves the degree of reservation open, subject to the provisions of paragraph (4). Contracting Parties may make minute or more extensive reservations to the right of remuneration. Contracting Parties may even set reciprocity (as to particular terms, such as duration of protection, or complete reciprocity) as a condition for according the remuneration right to performers and producers of phonograms who fulfil the criteria of eligibility in relation to another Contracting Party. Paragraph (3) contains an explicit clause referring to reservations attached to reciprocity in Article 16.1(a)(iv) of the Rome Convention. However, Contracting Parties may not make any reservations to this Article, or the rights provided for therein, that would derogate from their obligations to each other under the Rome Convention; Article 1(1) of the proposed Treaty makes this clear.

12.08 In paragraph (4) it is proposed that the possibility of making a reservation to the right of remuneration laid down in this Article would not apply to broadcasting and communication to the public by wire or wireless means which is offered to the public in the form of subscription-based services. The reason for this proposal is that in the context of such services, fixed performances of performers are exploited directly for commercial gain.

12.09 The remuneration right proposed in this Article is an attempt to reconcile two extremes: on the one hand, there is the position that performers and producers of phonograms are not entitled to any right to remuneration in respect of the fruits of their labour; on the other hand, there is the position that the right to remuneration should be broad or even that the right should be exclusive. Written proposals concerning this matter were submitted for the February 1996 session of the Committees of Experts by Argentina, Brazil, the European Community and its Member States, Japan, the Sudan, the United States of America, and Uruguay.

12.10 Article 19 contains provisions concerning the right of remuneration of producers of phonograms; it corresponds closely to this Article. The Notes on Article 19 concerning comparable elements are parallel to those above.

(1) Performers shall enjoy the right to a single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes or reproductions of such phonograms for broadcasting or for any communication to the public.

(2) Contracting Parties may establish in their national legislation that the single equitable remuneration shall be claimed from the user by the performer or by the producer of a phonogram or by both. Contracting Parties may enact national legislation that, in the absence of an agreement between the performer and the producer of a phonogram, sets the terms according to which performers and producers of phonograms shall share the single equitable remuneration. In the absence of either national legislation or an agreement between the performer and the producer of a phonogram, the performer and the producer of the phonogram shall equally share the single equitable remuneration between them.

(3) Any Contracting Party may, subject to the provisions of paragraph (4), in a notification deposited with the Director General of WIPO, declare that it will apply the provisions of paragraph (1) only in respect of certain uses, or that it will limit their application in some other way, or that it will not apply these provisions at all. In availing itself of this possibility, any Contracting Party may apply the provisions of Article 16.1(a)(iv) of the Rome Convention mutatis mutandis.

(4) The provisions of paragraph (3) do not apply to any broadcasting or any communication by wire or wireless means which can only be received on the basis of subscription and against payment of a fee.

13.01 Article 13 sets forth limitations of and exceptions to the rights of performers provided for in this Treaty.

13.02 Paragraph (1) reproduces the main principle of Article 15.2 of the Rome Convention. Contracting Parties may provide at the national level the same kinds of limitations or exceptions with regard to the protection of performers under the proposed Treaty as they provide with regard to the protection of copyright in literary and artistic works.

13.03 As drafted, the proposed Treaty incorporates (in this Article) the structure employed in Article 9(2) of the Berne Convention to limit the scope of permitted limitations of and exceptions to authors' reproduction rights. The proposed Treaty applies this structure to all limitations and exceptions permitted to be taken hereunder. The structure includes a three-step test. Any limitations or exceptions must be confined to certain special cases. No limitations or exceptions may ever conflict with the normal exploitation of the protected subject matter. Finally, any limitations or exceptions may never unreasonably prejudice the legitimate interests of the performer.

13.04 Paragraph (2) contains these provisions. Interpretation of them may follow the established interpretation of Article 9(2) of the Berne Convention.

13.05 Written proposals on limitations and exceptions were presented for the February 1996 session of the Committees of Experts by Argentina, Brazil, Canada, the European Community and its Member States, Japan, the Sudan, and the United States of America.

13.06 Article 20 contains provisions concerning limitations and exceptions to the rights of producers of phonograms; it corresponds closely to this Article. The Notes on Article 20 concerning comparable elements are parallel to those above.

(1) Contracting Parties may, in their national legislation, provide for the same kinds of limitations or exceptions with regard to the protection of performers as they provide for, in their national legislation, in connection with the protection of copyright in literary and artistic works.

(2) Contracting Parties shall confine any limitations or exceptions to rights provided for in this Treaty to certain special cases which do not conflict with the normal exploitation of the performance and do not unreasonably prejudice the legitimate interests of the performer.

14.01 Article 10 of the Rome Convention accords a right of reproduction to producers of phonograms. It provides that "producers of phonograms shall enjoy the right to authorize or prohibit the direct or indirect reproduction of their phonograms".

14.02 Article 14 of the proposed Treaty contains a proposal concerning the right of reproduction of producers of phonograms.

14.03 In paragraph (1), it is proposed that producers of phonograms shall enjoy the exclusive right of authorizing direct and indirect reproduction of their phonograms, whether permanent or temporary, in any manner or form.

14.04 The language of this provision is in harmony with the corresponding provision on performers' rights. It is proposed that producers of phonograms would be granted "the exclusive right of authorizing" direct or indirect reproduction. In this respect, there are no differences between the proposal and Article 10 of the Rome Convention.

14.05 There are two elements in the proposal that differ from the provisions of the Rome Convention and that imply an improvement in the level of protection. According to an explicit clause in the Article, the reproduction right would extend to both permanent and temporary reproduction. The result of reproduction may be a tangible permanent copy like a phonogram, a recording or a CD-ROM. It may as well be a copy of the phonogram on the hard disk of a PC, or in the working memory of a computer. Phonograms that are stored for a very short time may be reproduced or communicated further, or they may be made perceptible by an appropriate device.

14.06 Under the proposed Article 14, producers of phonograms would enjoy the exclusive right of authorizing reproduction "in any manner or form". This element manifests the broad scope of the right. Thus, storage of a phonogram in any electronic medium, for instance, constitutes reproduction. Reproduction includes such acts as uploading and downloading a phonogram to or from the memory of a computer. Digitization, i.e. the transfer of a phonogram embodied in an analog medium to a digital one constitutes always an act of reproduction. The expression "in any manner or form" is already found in Article 9(1) of the Berne Convention concerning the right of reproduction enjoyed by authors. It has been included in the present proposal to make it clear that there is no difference between the rights of producers of phonograms and authors in this respect.

14.07 According to paragraph (2) of the present proposal, it would be a matter for the legislation of Contracting Parties to limit the right of reproduction in the case of temporary reproduction of a phonogram, in whole or in part, in certain specific cases, namely where the purpose of the temporary reproduction is solely to make the phonogram perceptible or where the reproduction is of a transient or incidental nature. Moreover, the temporary reproduction must always take place in the course of use of the phonogram that is authorized by the producer of the phonogram or permitted by law. The purpose of this provision is to make it possible to exclude from the scope of the right of reproduction acts of reproduction that are not relevant in economic terms. By reference to Article 20(2), the limitations are further confined to cases that pass the three-step test in that Article, which corresponds to the test in Article 9(2) of the Berne Convention.

14.08 The European Community and its Member States proposed at the May 1996 session of the Committees of Experts that the proposed Treaty include a clause on the right of reproduction of producers of phonograms (document BCP/CE/VII/1-INR/CE/VI/1). The European Community and its Member States also proposed that the following points should be included in the "Records of the Conference"/"General Report": "Contracting Parties confirm that the permanent or temporary storage of a protected phonogram in any electronic medium constitutes a reproduction. This includes acts such as uploading and downloading of a phonogram to or from the memory of a computer."

14.09 The proposal by the European Community and its Member States received a positive reaction from many Government members of the Committee. In the discussions at the May 1996 session, several Delegations proposed that a provision with the same contents should be included in the proposed Treaty.

14.10 The proposal included in paragraph (1) of this Article is in substantial conformity with the proposal of the European Community and its Member States. At the same time, it meets the proposals referred to above in the discussions of the Committees of Experts.

14.11 For the February 1996 session of the Committees of Experts Argentina made a proposal on the definition of "reproduction": " 'Reproduction' of a phonogram or performance fixed on a phonogram means the act of making one or more originals or copies of all or a substantial part thereof, regardless of the method used to make the copy or the medium in which it is made, including storage of the phonogram or of the performance fixed on a phonogram in electronic form, regardless of the duration of the storage." The proposal corresponds in substance to the earlier proposal made by the International Bureau of WIPO. As was stated in Note 2.10 above, no definition of "reproduction" is included in the proposed Treaty. It appears, however, that the operative clause on the right of reproduction includes all the essential aspects of the proposal made by Argentina.

14.12 As further support for the proposal in Article 14, the following points may be made.

14.13 Technological developments have had a great impact on the means that may be used for reproduction. Complete and accurate reproductions may be made quickly and in such a way that the material reproduced resides only a short while in the memory of a computer. In some cases, a certain phonogram or piece of data may never be reproduced as a whole in the memory of a computer; only those parts of the material that are necessary to achieve a certain result may be reproduced, for instance in order to make a phonogram perceptible. In such cases, the successive reproduction of portions of a phonogram may, over a period of time, cover the whole phonogram.

14.14 Some relevant uses may, now or in the future, become totally based on a temporary reproduction.

14.15 Today, different countries may interpret the right of reproduction in different ways. Some countries may consider that temporary reproduction, at least some acts of reproduction the results of which live a very short time, does not fall under the right of reproduction, whereas other countries may take a contrary position. The Rome Convention does not serve to harmonize the right of reproduction among the Contracting States of that Convention.

14.16 The interpretation of a right of such importance as the right of reproduction should be in fair and reasonable harmony all over the world. A uniform interpretation is necessary. Already, the need for legal certainty and predictability has been felt and found lacking in concrete cases. The need for a uniform interpretation is dictated by the need to secure the functioning of the system of rights in a digital future.

14.17 The only way to harmonize effectively the interpretation of the scope of the right of reproduction is to confirm that temporary reproduction falls within the scope of the right.

14.18 It has been asserted in the discussions in the Committees of Experts that a reproduction right of wide scope might have some unintended and problematic effects. In principle, there are two ways to avoid such effects. The first is to narrow the definition of the reproduction. The second is by way of limitations of the right. It seems that many countries, having freedom of interpretation with respect to these rights, have already excluded the first possibility. This leaves only the second option: designing a limitations clause which makes it possible to avoid any problematic and unintended effects.

14.19 The provisions proposed in paragraph (2) are intended to focus on incidental, technical, and in some cases technically indispensable instances of reproduction which form part of another authorized or otherwise lawful use of a protected phonogram. The cases shall pass the three-step test of Article 20(2).

14.20 Note 18.06, concerning liability issues, applies with equal force to this Article.

14.21 Proposals concerning the right of reproduction of producers of phonograms were presented for the February 1996 session of the Committees of Experts by Argentina, Brazil, the European Community and its Member States, Japan, the People's Republic of China, the Sudan, the United States of America, and Uruguay. Canada suggested that economic right for producers of phonograms in their phonograms would be included in the Treaty. The European Community and its Member States made a further proposal on this issue for the May 1996 session of the Committee of Experts.

14.22 Article 7 contains provisions concerning the right of reproduction of performers; it corresponds closely to this Article. The Notes on Article 7 concerning comparable elements are parallel to those above.

(1) Producers of phonograms shall enjoy the exclusive right of authorizing the direct or indirect reproduction, whether permanent or temporary, of their phonograms, in any manner or form.

(2) Subject to the provisions of Article 20(2), it shall be a matter for legislation in Contracting Parties to limit the right of reproduction in cases where a temporary reproduction has the sole purpose of making the phonogram audible or where the reproduction is of a transient or incidental nature, provided that such reproduction takes place in the course of use of the phonogram that is authorized by the producer of the phonogram or permitted by law.

15.01 Article 15 provides producers of phonograms with the exclusive right to control modification of their phonograms.

15.02 The Article combines proposals made by Argentina, the United States of America, and Uruguay. Argentina used the term "modification" in its proposal, whereas the other proposals used the terms "adaptation" and "alteration". The term "modification" has been used in proposed Article 8 because it is sufficiently neutral and general and because it does not imply any interference with Article 2(3) of the Berne Convention, according to which certain adaptations and alterations of works may be protected.

15.03 It was suggested in sessions of the Committees of Experts that no separate right of alteration, adaptation, or modification is necessary. It has been argued that any alteration or modification of a performance or a phonogram cannot occur without reproducing the fixation of the performance or the phonogram. This modification right is proposed, however, in order to cover any possible situation in which digital or other technological manipulation might be used to circumvent traditional notions of reproduction.

15.04 Article 8 contains provisions concerning the right of modification of performers; it corresponds closely to this Article. The Notes on Article 8 concerning comparable elements are parallel to those above.

Producers of phonograms shall enjoy the exclusive right of authorizing the modification of their phonograms.

16.01 Producers of phonograms do not have a general right of distribution of their phonograms under any existing international agreement. The Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms, done in Geneva, October 29, 1971, provides producers of phonograms with protection against unauthorized duplication and against unauthorized importation and distribution of duplicates of their phonograms.

16.02 During the discussions that led to the proposed Treaty, it became clear that the principle of a general right of distribution for producers of phonograms, accompanied by appropriate provisions on exhaustion has gained wide international acceptance. However, no convergence of views has developed in respect of the scope or extent of the right of distribution after the first sale or other transfer of ownership of a copy of a phonogram. National legislation differs in this respect. In many jurisdictions, the principle is that in respect of a copy of a phonogram the right of distribution ceases to exist, i.e. is exhausted, after the first sale of that copy. Views differ as to whether the exhaustion should be national, regional or global.

16.03 In many legal systems, the right of rental is considered to be a part of the general right of distribution, and it could even be dealt with in an international instrument in that context. For practical reasons, the right of rental is dealt with as a separate issue in Article 17 of the proposed Treaty. This structure follows the way in which these issues were approached during the preparatory stages.

16.04 Article 16 provides an exclusive right of distribution to producers of phonograms. Because of the differences described in Note 16.02, two alternatives are offered. Alternative A is based on the principle of national or regional exhaustion. Alternative B allows global or international exhaustion. The basic provision on the right of distribution is identical in both alternatives: producers of phonograms shall enjoy the exclusive right of authorizing the making available to the public of the original and copies of their phonograms through sale or other transfer of ownership. Public lending falls outside the scope of this provision since it does not involve a sale or other transfer of ownership.

16.05 Alternative A also provides a right of importation, in addition to the general right of distribution, to the producers of phonograms in respect of copies of their phonograms.

16.06 Paragraph (1) of Alternative A provides for the exclusive right; item (i) delineates the right of distribution, and item (ii) delineates the right of importation.

16.07 Paragraph (2) allows Contracting Parties to provide in their national legislation that the right of distribution will not apply in respect of copies of phonograms that have been distributed with the consent of the rightholder in the territory of a Contracting Party. The right of importation is not affected by the first sale or other transfer of ownership. Paragraph (3) excludes from the scope of the right of importation those situations where the importation is effected by a person solely for personal and non-commercial use.

16.08 Some proposals presented for the February 1996 session of the Committee of Experts suggested that regional economic integration areas with their own legislation in this field might be explicitly mentioned in the clause concerning national or regional exhaustion. The obligations of the Treaty apply only to regional economic integration areas or organizations that are Contracting Parties to the Treaty. The territories of these Contracting Parties consist of the territories of their member countries. Thus, there is no need to make separate mention of regional economic integration areas.

16.09 Alternative B allows for international exhaustion. Contracting Parties may, in their national legislation, provide that the right of distribution will not extend to distribution after the first sale or other transfer of ownership of the original or copies of a phonogram by or pursuant to authorization. The first sale or transfer of ownership may have taken place in the Contracting Party or anywhere else.

16.10 No right of importation is provided for in Alternative B.

16.11 The rights provided for in the proposed Treaty, including the right of distribution, are minimum rights. Contracting Parties may provide a higher level of protection. A more restricted concept of exhaustion than international exhaustion represents a higher level of protection. Thus, the solution in Alternative B would not preclude any Contracting Party from applying any conditions or restrictions to the circumstances giving rise to exhaustion. National or regional exhaustion is in full conformity with this provision for those Contracting Parties that take this approach to the distribution right. Introduction of a right of importation is not excluded either.

16.12 The main contents of Alternative A follow the proposal of Argentina, Brazil, the European Community and its Member States, the Sudan, the United States of America, and Uruguay for the February 1996 session of the Committees of Experts. Alternative B is based on the main approach taken in the proposals made by Canada and Japan.

16.13 Article 9 contains provisions concerning the right of distribution of performers; it corresponds closely to this Article. The Notes on Article 9 concerning comparable elements are parallel to those above.

(1) Producers of phonograms shall enjoy the exclusive right of authorizing:

(i) the making available to the public of the original and copies of their phonograms through sale or other transfer of ownership;

(ii) the importation of the original or copies of their phonograms, even following any sale or other transfer of ownership of the original or copies by or pursuant to authorization.

(2) National legislation of a Contracting Party may provide that the right provided for in paragraph (1)(i) does not apply to distribution of the original or any copy of a phonogram that has been sold or the ownership of which has been otherwise transferred in that Contracting Party's territory by or pursuant to authorization.

(3) The right of importation in paragraph (1)(ii) does not apply where the importation is effected by a person solely for his personal and non-commercial use as part of his personal luggage.

(1) Producers of phonograms shall enjoy the exclusive right of authorizing the making available to the public of the original and copies of their phonograms through sale or other transfer of ownership.

(2) A Contracting Party may provide that the right provided for in paragraph (1) does not apply to distribution after the first sale or other transfer of ownership of the original or copies of phonograms by or pursuant to an authorization.

17.01 The Rome Convention does not contain any provisions on the rental of copies of fixed performances or phonograms.

17.02 In the TRIPS Agreement, producers of phonograms were accorded a right of rental. Article 14.4 of the Agreement obligates Members to apply mutatis mutandis the provisions of TRIPS Article 11, which concerns rental, for the benefit of producers of phonograms and any other rightholders as may exist in phonograms under a Member's national law.

17.03 Paragraph (1) of Article 17 provides producers of phonograms with the exclusive right of authorizing the rental of the original and copies of their phonograms. The rental of phonograms has been defined in Article 2.

17.04 Paragraph (2) contains a clause permitting Contracting Parties to maintain, for a limited period of time, any systems they may have for providing equitable remuneration to producers of phonograms for the rental of copies. This clause has been modelled on Article 14.4 of the TRIPS Agreement. According to the TRIPS Agreement, Members "may maintain such systems provided that the commercial rental of phonograms is not giving rise to the material impairment of the exclusive rights of reproduction of right holders". Contracting Parties that, on April 15, 1994, had and continue to have such systems may maintain them; however, instead of leaving this possibility open for an indefinite period of time, a three-year time limit is proposed, beginning from the entry into force of the proposed Treaty.

17.05 The rental right for producers of phonograms was included in the proposals submitted for the February 1996 session of the Committees of Experts by Argentina, Brazil, the European Community and its Member States, Japan, the Sudan, the United States of America, and Uruguay.

17.06 Article 10 contains provisions concerning the right of rental of performers; it corresponds closely to this Article. The Notes on Article 10 concerning comparable elements are parallel to those above.

(1) Producers of phonograms shall enjoy the exclusive right of authorizing the rental of the original and copies of their phonograms, even after distribution of them by or pursuant to authorization by the producer.

(2) Notwithstanding the provisions of paragraph (1), a Contracting Party that, on April 15, 1994, had and continues to have in force a system of equitable remuneration of producers of phonograms for the rental of copies of their phonograms, may maintain that system for a period of 3 years from the entry into force of this Treaty.

18.01 Article 18 introduces a new right for producers of phonograms: the exclusive right of making their phonograms available to the public. Article 18 is based on the May 1996 proposal made by the European Community and its Member States.

18.02 The proposed new right covers the making available of phonograms by wire or wireless means. A distinction is thus made between the distribution of copies of phonograms in physical, tangible form, which is covered by the right of distribution under Article 16, and the making available of phonograms by transmission.

18.03 The right of making available is limited to situations where members of public may access phonograms from a place and at a time individually chosen by them. Thus, the availability is based on interactivity and on on-demand access.

18.04 The proposed new right is designed to operate as a basic rule for the proper functioning of the electronic marketplace. The electronic or digital "record shop" can be compared to a record manufacturing plant or a CD factory. The functions of the manufacturing and distribution portions of the music industry and retail record shops may be replaced by a database open to the public for the direct delivery of music productions via communication networks to home computers.

18.05 The exclusive right laid down in Article 18 covers the making available of phonograms through systems that permit direct access to a certain phonogram stored in a database. The expressions "may access" and "from a place and at a time individually chosen" cover directly all situations that are interactive.

18.06 There are, however, systems and services based on particular technical arrangements and programming structures which make it possible to access the phonograms provided by the service without such access being fully interactive. Such services are offered on a subscription basis. From the point of view of the members of the public these services are "near to interactive". In many cases the only difference between interactive and "near to interactive" is in the time required for access. For both members of the public and rightholders, the shorter the delay, the closer the effect of such practices is to those of services that enable immediate access. The volume of protected subject matter that may be offered to the public in this way, combined with the fact that it may be made available through a number of parallel channels may add significantly to the ease of access. As the technical capacity of storage devices and communication networks grows these services are likely to develop further. They can be established by using cable or wire networks or by wireless means.

18.07 Practices described in the preceding Note could conflict with the normal exploitation of phonograms and unreasonably prejudice the legitimate interests of rightholders. Single channels offered on a subscription basis without being part of such services do not have these effects.

18.08 The proposed right of making available of phonograms in Article 18 is intended to cover both directly interactive ways of making available and services with similar effects, as described above. Both types of service fulfil the criteria laid down in Article 18 since members of the public may access phonograms from a place and at a time individually chosen by theme.

18.09 The right proposed in Article 18 is an exclusive right. This is fundamental.

18.10 It is strongly emphasized that Article 18 does not attempt to define the nature or extent of liability on a national level. The proposed international agreement determines only the scope of the exclusive rights that shall be granted to producers of phonograms in respect of their phonograms. The question of who shall be liable for the violation of these rights and what the extent of liability shall be for such violations is a matter for national legislation and case law according to the legal traditions of each Contracting Party.

18.11 Proposals concerning digital transmission were presented for the February 1996 session of the Committees of Experts by Argentina, the United States of America, and Uruguay. The European Community and its Member States made a proposal on this issue for the May 1996 session of the Committees of Experts.

18.12 Article 11 contains provisions concerning the right of making available of performers; it corresponds closely to this Article. The Notes on Article 11 concerning comparable elements are parallel to those above.

Producers of phonograms shall enjoy the exclusive right of authorizing the making available 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.

19.01 Article 12 of the Rome Convention grants to performers and to producers of phonograms the right to a single equitable remuneration if their phonogram is published for commercial purposes or if a reproduction of the phonogram is used for broadcasting or any communication to the public. The remuneration is paid by the user to the performer or to the producer of the phonogram or to both. In the absence of an agreement between these parties, national legislation may lay down the rules that govern the sharing of this remuneration.

19.02 The right to remuneration is subject to the reservations permitted in Article 16 of the Rome Convention. Under Article 16, any state may declare that it will not apply the provisions of that Article or that it will not apply them in respect of certain uses. Furthermore, a state may declare that it will not apply the right to remuneration in respect of phonograms the producer of which is not a national of another Contracting State. A Contracting State may also make the right to remuneration subject to reciprocity as regards the extent to which, and the term for which, another state grants protection to phonograms fixed by a national of the state making such a reservation.

19.03 Article 19 of the proposed Treaty accords to the producers of phonograms a right to equitable remuneration for the use of their phonograms that are published for commercial purposes or the use of a reproduction of such phonograms for broadcasting or any communication to the public. In general, this right corresponds to the right provided for in Article 12 of the Rome Convention.

19.04 Paragraph (1) does, however, propose additional elements that are not included in Article 12 of the Rome Convention. The right to remuneration would cover not only direct uses of phonograms but also indirect uses for broadcasting or for communication to the public. Remuneration should always be received both by performers and producers. In this way, the proposed Article 19 excludes the possibility that producers of phonograms would not receive at least a single equitable remuneration.

19.05 "Broadcasting" and "communication" are defined in Article 2. The definition of broadcasting covers rebroadcasting as discussed in Note 2.23 above. Communication covers all cases of cable or wire transmission, such as cable-originated television transmissions and sound radio by cable or in communication networks. Because the right covers both direct and indirect uses of phonograms, all forms of retransmission by cable and wire also fall within the scope of the right. The definition of communication also covers situations where a phonogram is played directly to the public present at the same location. Indirect communication of a phonogram covers situations where a radio or television set or other apparatus is used to make a phonogram that is included in a broadcast or wire communication audible to the public in a cafe, restaurant, hotel lobby or other place that is open to the public.

19.06 Paragraph (2) permits Contracting Parties to establish rules governing the way in which remuneration is shared between performers and producers of phonograms and the way in which users pay the required remuneration. These are logistical concerns that are beyond the scope of international agreements.

19.07 As noted above, the right to remuneration under the Rome Convention is subject to reservations. This basic structure has been reproduced in the proposed Treaty. The reservations clause in paragraph (3) leaves the degree of reservation open, subject to the provisions of paragraph (4). Contracting Parties may make minute or more extensive reservations to the right of remuneration. Contracting Parties may even set reciprocity (as to particular terms, such as duration of protection, or complete reciprocity) as a condition for according the remuneration right to performers and producers of phonograms who fulfil the criteria of eligibility in relation to another Contracting Party. Paragraph (3) contains an explicit clause referring to reservations attached to reciprocity in Article 16.1(a)(iv) of the Rome Convention. However, Contracting Parties may not make any reservations to this Article, or the rights provided for therein, that would derogate from their obligations to each other under the Rome Convention; Article 1(1) of the proposed Treaty makes this clear.

19.08 In paragraph (4) it is proposed that the possibility of making a reservation to the right of remuneration laid down in this Article would not apply to broadcasting and communication to the public by wire or wireless means which is offered to the public in the form of subscription-based services. The reason for this proposal is that in the context of such services, phonograms are exploited directly for commercial gain.

19.09 The remuneration right proposed in this Article is an attempt to reconcile two extremes: on the one hand, there is the position that performers and producers of phonograms are not entitled to any right to remuneration in respect of the fruits of their labour, on the other hand, there is the position that the right to remuneration should be broad or even that the right should be exclusive. Written proposals concerning this matter were submitted for the February 1996 session of the Committees of Experts by Argentina, Brazil, the European Community and its Member States, Japan, the Sudan, the United States of America, and Uruguay.

19.10 Article 12 contains provisions concerning the right to remuneration of performers; it corresponds closely to this Article. The Notes on Article 12 concerning comparable elements are parallel to those above.

(1) Producers of phonograms shall enjoy the right to a single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes or reproductions of such phonograms for broadcasting or for any communication to the public.

(2) Contracting Parties may establish in their national legislation that the single equitable remuneration shall be claimed from the user by the performer or by the producer of a phonogram or by both. Contracting Parties may enact national legislation that, in the absence of an agreement between the performer and the producer of a phonogram, sets the terms according to which performers and producers of phonograms shall share the single equitable remuneration. In the absence of either national legislation or an agreement between the performer and the producer of a phonogram, the performer and the producer of the phonogram shall equally share the single equitable remuneration between them.

(3) Any Contracting Party may, subject to the provisions of paragraph (4), in a notification deposited with the Director General of WIPO, declare that it will apply the provisions of paragraph (1) only in respect of certain uses, or that it will limit their application in some other way, or that it will not apply these provisions at all. In availing itself of this possibility, any Contracting Party may apply the provisions of Article 16.1(a)(iv) of the Rome Convention mutatis mutandis.

(4) The provisions of paragraph (3) do not apply to any broadcasting or any communication by wire or wireless means which can only be received on the basis of subscription and against payment of a fee.

20.01 Article 20 sets forth limitations of and exceptions to the rights of producers of phonograms provided for in this Treaty.

20.02 Paragraph (1) reproduces the main principle of Article 15.2 of the Rome Convention. Contracting Parties may provide at the national level the same kinds of limitations or exceptions with regard to the protection of producers of phonograms under the proposed Treaty as they provide with regard to the protection of copyright in literary and artistic works.

20.03 As drafted, the proposed Treaty incorporates (in this Article) the structure employed in Article 9(2) of the Berne Convention to limit the scope of permitted limitations of and exceptions to authors' reproduction rights. The proposed Treaty applies this structure to all limitations and exceptions permitted to be taken hereunder. The structure includes a three-step test. Any limitations or exceptions must be confined to certain special cases. No limitations or exceptions may ever conflict with the normal exploitation of the protected subject matter. Finally, limitations or exceptions may never unreasonably prejudice the legitimate interests of producers of phonograms.

20.04 Paragraph (2) contains these provisions. Interpretation of them may follow the established interpretation of Article 9(2) of the Berne Convention.

20.05 Written proposals on limitations and exceptions were presented for the February 1996 session of the Committees of Experts by Argentina, Brazil, Canada, the European Community and its Member States, Japan, the Sudan, and the United States of America.

20.06 Article 13 contains provisions concerning limitations and exceptions of rights of performers; it corresponds closely to this Article. The Notes on Article 13 concerning comparable elements are parallel to those above.

(1) Contracting Parties may, in their national legislation, provide for the same kinds of limitations or exceptions with regard to the protection of producers of phonograms as they provide for, in their national legislation, in connection with the protection of copyright in literary and artistic works.

(2) Contracting Parties shall confine any limitations of or exceptions to rights provided for in this Treaty to certain special cases which do not conflict with the normal exploitation of the phonogram and do not unreasonably prejudice the legitimate interests of the producer of phonograms.

21.01 The Rome Convention sets a minimum term of protection for performers and producers of phonograms of twenty years. According to Article 14, the term is calculated from the year in which the fixation was made, or in which the performance took place.

21.02 The TRIPS Agreement sets a term of protection for performers and producers of phonograms of fifty years. According to Article 14.5 of the Agreement, the term shall last at least until the end of a period of fifty years calculated from the end of the calendar year in which the fixation was made or in which the performance took place.

21.03 Article 21 proposes a general term of protection for performers and producers of phonograms of fifty years.

21.04 According to paragraph (1), the term of protection for performers would be calculated from the end of the year in which a fixed performance was published. In the case of unpublished fixed performances, the term would be calculated from the end of the year in which the performance took place. This paragraph contains another presentation of the "2.11 alternatives". Alternative A would be the proper selection if the Diplomatic Conference determined that the protection of performers ought to be confined to musical performances only. Alternative B would be the proper selection if the protection of the proposed Treaty were extended to performances fixed in any medium.

21.05 According to paragraph (2), the term of protection for producers of phonograms would be calculated from the end of the year in which the phonogram was published, and in case of unpublished phonograms, from the end of the year in which the fixation was made.

21.06 The reasons for setting the term of protection at this proposed level are obvious. There is a clear trend towards a fifty-year term of protection for performers and for producers of phonograms. The International Bureau of WIPO proposed this term in its memoranda to the first session of the Committee of Experts in 1993 (document INR/CE/I/2) and to the third session in 1994 (document INR/CE/III/2).

21.07 A fifty-year term of protection for performers and producers of phonograms was suggested by Argentina, Canada, the European Community and its Member States, Japan, the United States of America, and Uruguay. Argentina and Uruguay proposed a term of fifty years post mortem for performers. In other proposals, the method of calculation was attached in different ways to the years of publication, fixation and/or performance. The proposal in the proposed Treaty makes an attempt to combine these approaches.

(1) The term of protection to be granted to performers under this Treaty shall last, at least, until the end of a period of 50 years computed from the end of the year in which the

Alternative A: musical performance fixed in a phonogram

Alternative B: performance fixed in any medium

was published, and in case of unpublished fixed performances, from the end of the year in which the performance took place.

(2) The term of protection to be granted to producers of phonograms under this Treaty shall last, at least, until the end of a period of 50 years computed from the end of the year in which the phonogram was published, and in case of unpublished phonograms, from the end of the year in which the fixation was made.

22.01 Article 22 contains provisions on obligations concerning technological measures.

22.02 According to paragraph (1) Contracting Parties shall make unlawful the importation, manufacture or distribution of protection-defeating devices or the offer or performance or services having the same effect. A condition for proscription is that the person performing the act knows or has reasonable grounds to know that the device or service will be used for or in the course of the unauthorized exercise of any of the rights provided for under the proposed Treaty. This knowledge requirement therefore focuses on the purpose for which the device or service will be used. The expression "knowing or having reasonable grounds to know" has the same meaning as the expression "knowingly or with reasonable grounds to know" in the provisions on enforcement in the TRIPS Agreement.

22.03 Paragraph (2) includes a provision on remedies against the unlawful acts referred to in paragraph (1). The reason for a special provision on remedies is the fact that the provisions on enforcement in the TRIPS Agreement, which are applicable according to Article 27 of the proposed Treaty, only concern "any act of infringement of intellectual property rights covered by this Agreement". The obligations established in the proposed Article 22 are more akin to public law obligations directed at Contracting Parties than to provisions granting "intellectual property rights".

22.04 Contracting Parties are free to choose appropriate remedies according to their own legal traditions. The main requirement is that the remedies provided are effective and thus constitute a deterrent and a sufficient sanction against the prohibited acts.

22.05 Contracting Parties may design the exact field of application of the provisions envisaged in this Article taking into consideration the need to avoid legislation that would impede lawful practices and the lawful use of subject matter that is in the public domain. Having regard to differences in legal traditions, Contracting Parties may, in their national legislation, also define the coverage and extent of the liability for violation of the prohibition enacted according to paragraph (1).

22.06 Paragraph (3) contains the definition of a "protection-defeating device". It describes the characteristics of devices falling within the scope of the obligations under paragraph (1). To achieve the necessary coverage, the phrase "primary purpose or primary effect of which is to circumvent..." has been used rather than "specifically designed or adapted to circumvent...".

22.07 Proposals concerning the obligations of Contracting Parties in connection with protection-defeating devices and other technological measures were presented for the February 1996 session of the Committees of Experts by Argentina, Brazil, and the United States of America. The European Community and its Member States, and the Republic of Korea made a proposal on this issue for the May 1996 session of the Committees of Experts.

(1) Contracting Parties shall make unlawful the importation, manufacture or distribution of protection-defeating devices, or the offer or performance of any service having the same effect, by any person knowing or having reasonable grounds to know that the device or service will be used for, or in the course of, the exercise of rights provided under this Treaty that is not authorized by the rightholder or the law.

(2) Contracting Parties shall provide for appropriate and effective remedies against the unlawful acts referred to in paragraph (1).

(3) As used in this Article, "protection-defeating device" means any device, product or component incorporated into a device or product, the primary purpose or primary effect of which is to circumvent any process, treatment, mechanism or system that prevents or inhibits any of the acts covered by the rights under this Treaty.

23.01 Article 23 contains provisions on obligations with regard to rights management information.

23.02 According to paragraph (1) Contracting Parties shall make it unlawful for any person to remove or alter any electronic rights management information without authority, or to distribute, import for distribution or communicate to the public, without authority, copies of fixed performances or phonograms from which such information has been removed or in which it has been altered. A requirement for proscription is that the person who performs these acts does so knowingly. The obligation of Contracting Parties covers rights management information in electronic form only.

23.03 Paragraph (2) identifies the information that is within the scope of this Article. The scope has been limited to information which identifies the performer, the performance of the performer, the producer of the phonogram, the phonogram, and the owner of any right in the performance or phonogram and any numbers or codes that represent such information. The obligations of this provision cover such information only when it is attached to a copy of a fixed performance or a phonogram, or appear in connection with the communication of a fixed performance or phonogram to the public. Nothing precludes a broader field of application for provisions on rights management information in national legislation.

23.04 Contracting Parties may design the exact field of application of the provisions envisaged in this Article taking into consideration the need to avoid legislation that would impede lawful practices. Having regard to differences in legal traditions, Contracting Parties may, in their national legislation, also define the coverage and extent of the liability for violation of the prohibition enacted according to paragraph (1).

23.05 Contracting Parties may, when implementing the obligations established by this Article, specifically limit the scope of the provisions in their national law in such a way that technically non-feasible requirements are not imposed on broadcasting organizations and other users engaged in the duly authorized communication of fixed performances or phonograms or retransmission of broadcasts.

23.06 It should be pointed out that the use of electronic rights management information is voluntary. The obligations of Contracting Parties concerning rights management information only apply in cases where such information has been given.

23.07 It should be observed that the wilful removal or alteration of rights management information in order to achieve financial gain is a matter which falls within the scope of the provisions of the penal codes in most countries. This may be taken into account when the obligations of the Contracting Parties are considered by the Diplomatic Conference.

23.08 Proposals on rights management information were presented for the February 1996 session of the Committees of Experts by Brazil, Canada, and the United States of America.

(1) Contracting Parties shall make it unlawful for any person knowingly to perform any of the following acts:

(i) to remove or alter any electronic rights management information without authority;

(ii) to distribute, import for distribution or communicate to the public, without authority, copies of fixed performances or phonograms from which 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 performer, the performance of the performer, the producer of the phonogram, the phonogram, and the owner of any right in the performance or phonogram and any numbers or codes that represent such information, when any of these items of information are attached to a copy of a fixed performance or a phonogram, or appear in connection with the communication of a fixed performance or a phonogram to the public.

24.01 Article 24 states the fundamental principles of formality-free protection and independence of protection which follow the model of the Berne Convention. The provisions are to be interpreted in an equivalent manner to those of the Berne Convention.

24.02 Paragraph (1) sets forth the principle of automatic protection. No formalities may be set as a condition for the enjoyment and exercise of rights provided for in the proposed Treaty. The wording of the provision follows the wording of Article 5(2) of the Berne Convention.

24.03 Paragraph (2) includes a provision on the independence of protection which is in line with the second half of the first sentence of Article 5(2) of the Berne Convention.

(1) The enjoyment and exercise of the rights provided for in this Treaty shall not be subject to any formality.

(2) Such enjoyment and such exercise shall be independent of the existence of protection in the country of origin of the performance or phonogram.

25.01 The driving principle behind this Article is that no reservations are permitted to the proposed Treaty.

25.02 It has, however, been necessary to propose that reservations would be permitted in respect of two issues. These provisions have been taken in Article 25.

25.03 As was discussed in Note 2.18 above, an alternative solution is offered based on the possibility of limiting the scope of the rights of performers. It is proposed that any party, upon becoming a Contracting Party, could make a reservation and confine the protection accorded by them to performers to musical performances or to musical performances fixed in phonograms only. This proposal is included in paragraph (1) of Article 25 as Alternative C. This Alternative may be selected only if the Diplomatic Conference should decide to adopt Alternatives B in all the Articles listed in Alternative C of Article 25(1). (See also Note 2.18.)

25.04 Alternative D is presented in Article 25(1) for the case where the Diplomatic Conference does not base its decision on the scope of performers' rights on Alternatives B in the Articles listed in Alternative C of Article 25(1), and decides not to use the technique of reservation in this issue. In such a case the proposed paragraph (2) of Article 25 would replace the proposed paragraph (1).

25.05 The right to remuneration for broadcasting and communication to the public may be subject to reservation according to Article 12(3) and Article 19(3), subject to the provisions of Article 12(4) and Article 19(4) concerning subscription-based services.

25.06 The possibility of making reservations referred to in the preceding Note has been taken into the proposed Treaty in order to achieve the widest possible acceptance of the Treaty as a whole. Different degrees of reservation are permitted. Over a period of years there has been a substantial opportunity to observe the operation of Article 12 of the Rome Convention. Most Contracting States of that Convention have chosen not to make a total reservation to the right of remuneration. By constructing the proposed Treaty in a manner likely to achieve the widest acceptance, it may be possible to establish not only an important general level of international protection but also bring together countries that, between themselves, wish to maintain a higher level of protection.

(1) Any party upon becoming a Contracting Party to this Treaty, may, in a notification deposited with the Director General of WIPO, declare that it will apply the provisions of:

(i) Article 2(c) and Article 2(h) to sounds only;

(ii) Article 5(1) and Article 6 to musical performances only; and

(iii) Article 7, Article 8, Article 9(1), Article 10, Article 11, and Article 21(1) to musical performances fixed in phonograms only.

[No such provision]

(2) Subject to the provisions of Article 12(3), 19(3), and paragraph (1) of this Article, no reservations to this Treaty shall be permitted.

26.01 Article 26 contains the provisions that govern application of the proposed Treaty in respect of performances, phonograms, rights and obligations that came into being before the proposed Treaty would come into force. By including these provisions in the proposed Treaty, more uniform worldwide application will be achieved.

26.02 According to paragraph (1), the proposed Treaty would be applicable to performances that took place and phonograms that were fixed before the date on which the Treaty would enter into force for the respective Contracting Parties. This approach differs from that adopted in the Rome Convention, but it is similar to the approach taken in the TRIPS Agreement. The objective of the provision is a wide harmonization of protection at least insofar as the time aspect is concerned. The reproduction and distribution of protected subject matter does not follow national or regional boundaries and the market has become truly international. It is therefore critical to avoid the discrepancies that might result from a less comprehensive solution.

26.03 The provisions of paragraph (1) are intended to be as clear as possible in order to avoid any legal uncertainty. Even though it goes without saying, an explicit statement has been included at the end of paragraph (1) repeating the fact that the duration of the protection granted to existing subject matter follows the provisions of Article 21.

26.04 Paragraph (2) makes clear that the protection accorded by the proposed Treaty shall not be retroactive. It safeguards previously acquired rights in the same way as Article 20.1 of the Rome Convention. In addition, it specifies that the protection accorded by the proposed Treaty is without prejudice to any acts performed, agreements concluded or rights acquired before the entry into force of the proposed Treaty for each Contracting Party.

26.05 Paragraph (3) allows transitional arrangements concerning fixations of performances and copies of phonograms lawfully made before the entry into force of the Treaty for each Contracting Party. Contracting Parties may fix a term during which the sale and rental of previously made fixations of performances or copies of phonograms may continue. Contracting Parties that avail themselves of this option should nonetheless take into consideration the economic implications of the term they fix. Contracting Parties should take into account both the legitimate interests of users who have invested in good faith in the production of copies at a time when fixed performances and phonograms were not protected, and the purpose of the proposed Treaty, which is to provide rightholders with effective protection.

(1) Contracting Parties shall also apply provisions of this Treaty to performances that took place and phonograms that were fixed before the date of entry into force of this Treaty for each that Contracting Party. The duration of the protection shall be determined according to the provisions of Article 21.

(2) The protection provided for in paragraph (1) shall be without prejudice to any acts concluded or rights acquired before the entry into force of this Treaty for each Contracting Party.

(3) Contracting Parties may provide for conditions under which fixations of performances and copies of phonograms which were lawfully made before the entry into force of this Treaty for each Contracting Party may be distributed to the public or rented during a limited period of time.

27.01 Two alternatives on enforcement are presented in Article 27. The choice between them has been left to the Diplomatic Conference. This is because the issue of enforcement is a horizontal one that must be considered in connection with the two other proposed Treaties published simultaneously with the present proposed Treaty. Each of the two alternatives is based on the enforcement provisions of Part III, Articles 41 to 61, of the TRIPS Agreement on enforcement.

27.02 Alternative A consists of the text of Article 27 and an Annex. Paragraph (1) introduces the Annex which contains the substantive provisions on enforcement. Paragraph (2) states that the Annex forms an integral part of the proposed Treaty. The provisions of the Annex have the same status as the provisions of the proposed Treaty.

27.03 Alternative B incorporates the enforcement provisions in the TRIPS Agreement by reference. The provisions of Alternative B obligate Contracting Parties to ensure that proper enforcement procedures, as specified in Part III, are available. To this end, Contracting Parties shall apply the relevant provisions of the TRIPS Agreement mutatis mutandis.

(1) Special provisions regarding the enforcement of rights are included in the Annex to the Treaty.

(2) The Annex forms an integral part of this Treaty.

Contracting Parties shall ensure that the enforcement procedures specified in Part III, Articles 41 to 61, of the Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods, Annex 1C, of the Marrakesh Agreement Establishing the World Trade Organization, concluded on April 15, 1994 (the "TRIPS Agreement"), are available under their national laws so as to permit effective action against any act of infringement of the rights provided under this Treaty, including expeditious remedies to prevent infringements, and remedies that constitute a deterrent to further infringements. To this end, Contracting Parties shall apply mutatis mutandis the provisions of Articles 41 to 61 of the TRIPS Agreement.

1. Contracting Parties shall ensure that enforcement procedures as specified in this Annex are available under their law so as to permit effective action against any act of infringement of rights covered by this Treaty, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

2. Procedures concerning the enforcement of rights covered by this Treaty shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.

3. Decisions on the merits of a case shall preferably be in writing and reasoned. They shall be made available at least to the parties to the proceeding without undue delay. Decisions on the merits of a case shall be based only on evidence in respect of which parties were offered the opportunity to be heard.

4. Parties to a proceeding shall have an opportunity for review by a judicial authority of final administrative decisions and, subject to jurisdictional provisions in a Contracting Party's law concerning the importance of a case, of at least the legal aspects of initial judicial decisions on the merits of a case. However, there shall be no obligation to provide an opportunity for review of acquittals in criminal cases.

5. It is understood that this Annex does not create any obligation to put in place a judicial system for the enforcement of rights covered by this Treaty distinct from that for the enforcement of law in general, nor does it affect the capacity of Contracting Parties to enforce their law in general. Nothing in this Annex creates any obligation with respect to the distribution of resources as between enforcement of rights covered by this Treaty and the enforcement of law in general.

Contracting Parties shall make available to the right holders¹ civil judicial procedures concerning the enforcement of any right covered by this Treaty. Defendants shall have the right to written notice which is timely and contains sufficient detail, including the basis of the claims. Parties shall be allowed to be represented by independent legal counsel, and procedures shall not impose overly burdensome requirements concerning mandatory personal appearances. All parties to such procedures shall be duly entitled to substantiate their claims and to present all relevant evidence. The procedure shall provide a means to identify and protect confidential information, unless this would be contrary to existing constitutional requirements.

1. The judicial authorities shall have the authority, where a party has presented reasonably available evidence sufficient to support its claims and has specified evidence relevant to substantiation of its claims which lies in the control of the opposing party, to order that this evidence be produced by the opposing party, subject in appropriate cases to conditions which ensure the protection of confidential information.

2. In cases in which a party to a proceeding voluntarily and without good reason refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes a procedure relating to an enforcement action, a Contracting Party may accord judicial authorities the authority to make preliminary and final determinations, affirmative or negative, on the basis of the information presented to them, including the complaint or the allegation presented by the party adversely affected by the denial of access to information, subject to providing the parties an opportunity to be heard on the allegations or evidence.

1. The judicial authorities shall have the authority to order a party to desist from an infringement, inter alia to prevent the entry into the channels of commerce in their jurisdiction of imported goods that involve the infringement of a right covered by this Treaty, immediately after customs clearance of such goods. Contracting Parties are not obliged to accord such authority in respect of protected subject matter acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing in such subject matter would entail the infringement of a right covered by this Treaty.

[Paragraph 2 of Article 44 of the TRIPS Agreement is not reproduced here.]

1. The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement of that person's right covered by this Treaty by an infringer who knowingly, or with reasonable grounds to know, engaged in infringing activity.

2. The judicial authorities shall also have the authority to order the infringer to pay the right holder expenses, which may include appropriate attorney's fees. In appropriate cases, Contracting Parties may authorize the judicial authorities to order recovery of profits and/or payment of pre-established damages even where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity.

In order to create an effective deterrent to infringement, the judicial authorities shall have the authority to order that goods that they have found to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder, or, unless this would be contrary to existing constitutional requirements, destroyed. The judicial authorities shall also have the authority to order that materials and implements the predominant use of which has been in the creation of the infringing goods be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements. In considering such requests, the need for proportionality between the seriousness of the infringement and the remedies ordered as well as the interests of third parties shall be taken into account. [A clause not reproduced here.]

Contracting Parties may provide that the judicial authorities shall have the authority, unless this would be out of proportion to the seriousness of the infringement, to order the infringer to inform the right holder of the identity of third persons involved in the production and distribution of the infringing goods or services and of their channels of distribution.

1. The judicial authorities shall have the authority to order a party at whose request measures were taken and who has abused enforcement procedures to provide to a party wrongfully enjoined or restrained adequate compensation for the injury suffered because of such abuse. The judicial authorities shall also have the authority to order the applicant to pay the defendant expenses, which may include appropriate attorney's fees.

2. In respect of the administration of any law pertaining to the protection or enforcement of rights covered by this Treaty, Contracting Parties shall only exempt both public authorities and officials from liability to appropriate remedial measures where actions are taken or intended in good faith in the course of the administration of that law.

To the extent that any civil remedy can be ordered as a result of administrative procedures on the merits of a case, such procedures shall conform to principles equivalent in substance to those set forth in this Section.

1. The judicial authorities shall have the authority to order prompt and effective provisional measures:

(a) to prevent an infringement of any right covered by this Treaty from occurring, and in particular to prevent the entry into the channels of commerce in their jurisdiction of goods, including imported goods immediately after customs clearance;

(b) to preserve relevant evidence in regard to the alleged infringement.

2. The judicial authorities shall have the authority to adopt provisional measures inaudita altera parte where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed.

3. The judicial authorities shall have the authority to require the applicant to provide any reasonably available evidence in order to satisfy themselves with a sufficient degree of certainty that the applicant is the right holder and that the applicant's right is being infringed or that such infringement is imminent, and to order the applicant to provide a security or equivalent assurance sufficient to protect the defendant and to prevent abuse.

4. Where provisional measures have been adopted inaudita altera parte, the parties affected shall be given notice, without delay after the execution of the measures at the latest. A review, including a right to be heard, shall take place upon request of the defendant with a view to deciding, within a reasonable period after the notification of the measures, whether these measures shall be modified, revoked or confirmed.

5. The applicant may be required to supply other information necessary for the identification of the goods concerned by the authority that will execute the provisional measures.

6. Without prejudice to paragraph 4, provisional measures taken on the basis of paragraphs 1 and 2 shall, upon request by the defendant, be revoked or otherwise cease to have effect, if proceedings leading to a decision on the merits of the case are not initiated within a reasonable period, to be determined by the judicial authority ordering the measures where a Contracting Party's law so permit or, in the absence of such a determination, not to exceed 20 working days or 31 calendar days, whichever is the longer.

7. Where the provisional measures are revoked or where they lapse due to any act or omission by the applicant, or where it is subsequently found that there has been no infringement or threat of infringement of a right covered by this Treaty, the judicial authorities shall have the authority to order the applicant, upon request of the defendant, to provide the defendant appropriate compensation for any injury caused by these measures.

8. To the extent that any provisional measure can be ordered as a result of administrative procedures, such procedures shall conform to principles equivalent in substance to those set forth in this Section.

Contracting Parties shall, in conformity with the provisions set out below, adopt procedures³ to enable a right holder, who has valid grounds for suspecting that the importation of [words omitted] pirated goods⁴ may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods. [A clause omitted]. Contracting Parties may also provide for corresponding procedures concerning the suspension by the customs authorities of the release of infringing goods destined for exportation from their territories.

Any right holder initiating the procedures under Article 11 shall be required to provide adequate evidence to satisfy the competent authorities that, under the laws of the country of importation, there is prima facie an infringement of the right holder's right covered by this

Treaty and to supply a sufficiently detailed description of the goods to make them readily recognisable by the customs authorities. The competent authorities shall inform the applicant within a reasonable period whether they have accepted the application and, where determined by the competent authorities, the period for which the customs authorities will take action.

1. The competent authorities shall have the authority to require an applicant to provide a security or equivalent assurance sufficient to protect the defendant and the competent authorities and to prevent abuse. Such security or equivalent assurance shall not unreasonably deter recourse to these procedures.

[Paragraph 2 of Article 53 of the TRIPS Agreement is not reproduced here.]

The importer and the applicant shall be promptly notified of the suspension of the release of goods according to Article 11.

If, within a period not exceeding 10 working days after the applicant has been served notice of the suspension, the customs authorities have not been informed that proceedings leading to a decision on the merits of the case have been initiated by a party other than the defendant, or that the duly empowered authority has taken provisional measures prolonging the suspension of the release of the goods, the goods shall be released, provided that all other conditions for importation or exportation have been complied with; in appropriate cases, this time-limit may be extended by another 10 working days. If proceedings leading to a decision on the merits of the case have been initiated, a review, including a right to be heard, shall take place upon request of the defendant with a view to deciding, within a reasonable period, whether these measures shall be modified, revoked or confirmed. Notwithstanding the above, where the suspension of the release of goods is carried out or continued in accordance with a provisional judicial measure, the provisions of paragraph 6 of Article 10 shall apply.

Relevant authorities shall have the authority to order the applicant to pay the importer, the consignee and the owner of the goods appropriate compensation for any injury caused to them through the wrongful detention of goods or through the detention of goods released pursuant to Article 15.

Without prejudice to the protection of confidential information, Contracting Parties shall provide the competent authorities the authority to give the right holder sufficient opportunity to have any goods detained by the customs authorities inspected in order to substantiate the right holder's claims. The competent authorities shall also have authority to give the importer an equivalent opportunity to have any such goods inspected. Where a positive determination has been made on the merits of a case, Contracting Parties may provide the competent authorities the authority to inform the right holder of the names and addresses of the consignor, the importer and the consignee and of the quantity of goods in question.

Where Contracting Parties require competent authorities to act upon their own initiative and to suspend the release of goods in respect of which they have acquired prima facie evidence that a right covered by this Treaty is being infringed:

(a) the competent authorities may at any time seek from the right holder any information that may assist them to exercise these powers;

(b) the importer and the right holder shall be promptly notified of the suspension. Where the importer has lodged an appeal against the suspension with the competent authorities, the suspension shall be subject to the conditions, mutatis mutandis, set out at Article 15;

(c) Contracting Parties shall only exempt both public authorities and officials from liability to appropriate remedial measures where actions are taken or intended in good faith.

Without prejudice to other rights of action open to the right holder and subject to the right of the defendant to seek review by a judicial authority, competent authorities shall have the authority to order the destruction or disposal of infringing goods in accordance with the principles set out in Article 6. [A clause not reproduced here.]

Contracting Parties may exclude from the application of above provisions small quantities of goods of a non-commercial nature contained in travellers' personal luggage or sent in small consignments.

Contracting Parties shall provide for criminal procedures and penalties to be applied at least in cases of wilful [words omitted] piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary fines sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity. In appropriate cases, remedies available shall also include the seizure, forfeiture and destruction of the infringing goods and of any materials and implements the predominant use of which has been in the commission of the offence. [A clause not reproduced here.]

¹ For the purpose of this Annex, the term "right holder" includes federations and associations having legal standing to assert such rights.

² Where a Contracting Party has dismantled substantially all controls over movement of goods across its border with another Contracting Party with which it forms part of a customs union, it shall not be required to apply the provisions of this Section at that border.

³ It is understood that there shall be no obligation to apply such procedures to imports of goods put on the Market in another country by or with the consent of the right holder, or to goods in transit.

⁴ For the purposes of this Annex: "pirated goods" shall mean any goods which are copies made without the consent of the right holder or person duly authorized by the right holder in the country of production and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a right covered by this Treaty under the law of the country of importation.