March 2017 – WTO TRIPS Council – Brazil’s statement on copyright and e-commerce

At the March 2017 session of the WTO TRIPS Council, Brazil delivered the following statement on copyright and e-commerce.

Copyright and e-commerce

Statement from Brazil

Thank you for this opportunity to present our document on electronic commerce and copyright. It responds to the invitation of the work programme on electronic commerce to examine and debate trade-related issues of global e-commerce. We wish to launch a comprehensive discussion of copyright management in the digital environment and we invite the delegations to express their views on this important subject.

Mr. Chairman,

Recent advances in technology have enabled the creation of business models based on the use of copyrighted works in digital platforms. Unlike the physical environment, access of such works is made without transfer of ownership or possession of the work by the final user. Those innovative business models created new forms of management of rights, generating opportunities and challenges for all participants in the creative process. The success of these new models was underlined in 2015, when the digital market surpassed sales of physical formats and became the primary source of revenue for recorded music.

Legitimate concerns are being raised at national and international level regarding the remuneration of copyrighted works. Digital platforms affirm that most of their revenue is being distributed as royalties, but authors and performers complain about lack of remuneration. Likewise, producers and the cultural industry highlight a “value gap” in the amount due for the rights.

The modern music business involves a huge number of micro-transactions, in which stakeholders receive fractions of the revenue generated. New technologies would normally be associated to more transparency, but actually we are seeing the opposite: opaque contractual frameworks create an obstacle for the due diligence of creators and artists when considering the commercialization of their work.

Brazil argues that a first possible decision on copyright management for fair payments could stress the importance of transparency in the remuneration of copyright and related works in the digital environment. This would allow creators and artists to properly understand the payments and accounts they receive.

Mr. Chairman,
Copyrights laws recognize certain limitations on economic rights of protected works. Those limitations have the character of public interest, in that they strike a balance between the interest of right-holders and the users of such works. For this reason, they are present in every legislation of Member States.

In the business model of digital platforms, technological protection measures are widely used, offering an almost absolute control of digital intellectual goods. However, TPMs in the physical environment were already considered an obstacle to the exercise of some legitimate uses defined as limitations or exceptions to copyright by national legislations. This is magnified in the digital environment and may halt even the simplest operations, such as the interoperability and portability of digital goods.

There is a growing concern that obligations related to the inviolability of TPMs might exclude the possibility of enjoying exceptions and limitations in the digital environment. These technologies are essential for the normal exploitation of the work in e-trade and its circumvention could be understood as a breach of international obligations (step 2 of the three step test). Therefore, the second collective initiative suggested to improve management of copyright in the digital environment is to clearly assert that exceptions and limitations available in physical formats should also be made available in the digital environment.

Finally, Mr. Chairman, the last aspect of the document relates to the territoriality of copyright. The digital environment is borderless by its nature while the copyright system is based on national laws. These different characteristics make more challenging the task of implementing the shared objective of protecting authors, performers and other copyright holders in the digital environment. Payments to digital platforms, for instance, can be made through international credit cards, bypassing the law in the country of access to the creative content.

It is thus suggested that Members reaffirm the territoriality of copyright as a principle of the international trading system, making their national copyright legislation applicable to trade relations where content is accessed from within their national borders.

The three areas highlighted should be considered building blocks of a sound business environment for the international trade of intellectual goods. They should continue to be explored in order to find common understanding among Members and to provide the General Council with the information necessary to consider the way forward on the matter.

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