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On January 26, 1999, the European Community (EC) and its Member States requested consultation with the United States concerning a dispute over discrepancies between the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) and Section 110(5) of the United States Copyright Act amended by the Fairness in Music Licensing Act. The dispute was over the legality of "the playing of radio and television music in public places (such as bars, shops, restaurants etc.) without the payment of a royalty fee" (World). The disputed parties worked through the existing process of WTO Dispute Settlement. First the EC lodged a complaint against the US with the Dispute Settlement Body (DSB) and requested consultation over the dispute. Then the parties requested a panel leading to the body's eventual formation, followed by the circulation of the panel report. The parties accepted the Panel Report without appeal and the dispute ended in arbitration over implementation of the panel's recommendations. Australia, Brazil, Canada, Japan, and Switzerland acted as third parties in this dispute (World).
The European Community and its Member States considered the United States in violation of international copyright law at the cost of European artists. The European Community questioned the US Copyright Act in which Section 110(5) creates two exemptions. The first, a so-called "business exemption", allowed food, drink, and retail establishments under certain size and equipment restrictions, to display audio or visual transmissions without paying a royalty fee provided the establishments did not charge directly for the transmission and did not display the service beyond the establishment’s boundaries. The second, a "homestyle exemption", gave the same exemption to small establishments that used only broadcasting equipment commonly found in private homes (World). The two TRIPs articles cited by the European Community disagreed with the US exemptions, stating 1) in article 13, that exceptions to copyright law would be exclusive to cases that do not "unreasonably" run contrary to the interests of the right holder and 2) in article 9(1), that members party to the TRIPs agreement would almost entirely comply with the Berne Convention for the Protection of Literary and Artistic Works (TRIPS).
The Berne Convention is an international agreement that defines creative property rights across borders, which gives the copyright holder the exclusive right to control not only the broadcast of the work but also the public exhibition of it through the use of "loudspeaker or analogous instrument". The complainant specifically noted article 11(1) of the Berne Convention which places the right to control "any communication to the public of the performance of [the] works" "by any means" solely in the copyright holder (Berne).
The Panel defined three principles that the US exemptions had to uniformly meet to prove valid. The panel stated that if the exceptions "(i) [were] confined to certain special cases; (ii) [did] not conflict with a normal exploitation of the work; and (iii) [did] not unreasonably prejudice the legitimate interests of the right holder" they would not violate the Berne Convention (Report). The Panel, noting that 45–73% of pertinent establishments were covered by the exemption, found the "business exemption" to violate Article 13 of the TRIPs Agreement, thus inconsistent with Article 11 of the Berne Convention, and recommended that the Dispute Settlement Body require the United States to rework the law into accordance with the TRIPs Agreement. Comparatively, the "homestyle exemption", which only affected 13–18% of establishments, met the Article 13 requirements thus agreed with the Berne Convention. The DSB adopted the report on July 27, 2000 (US – Section 110(5)).
The parties calculated that the "business exemption" had nullified €1,219,900 per year. The United States proposed 15 months as a reasonable amount of time needed to implement the recommendations of the DSB and, after some arbitration, the DSB and EC accepted the time period. The US, however, failed to bring the law into the bounds of the TRIPs Agreement within the deadline, and the European Communities pressured the DSB to "suspend concessions". As both the EC and the third party Australia bemoaned the United States' slow progress, the US continually reported that its delegation was working with Congress to enact the settlement. In the end, the US failed to mobilize Congress to pass the issue before the next Congressional recess. The EC and the US reached a mutual temporary agreement on June 23, 2003 (World).
The Universal Copyright Convention (UCC), adopted in Geneva, Switzerland, in 1952, is one of the two principal international conventions protecting copyright; the other is the Berne Convention.
The World Intellectual Property Organization Copyright Treaty is an international treaty on copyright law adopted by the member states of the World Intellectual Property Organization (WIPO) in 1996. It provides additional protections for copyright to respond to advances in information technology since the formation of previous copyright treaties before it. As of August 2021, the treaty has 110 contracting parties. The WCT and WIPO Performances and Phonograms Treaty, are together termed WIPO "internet treaties".
The Berne three-step test is a clause that is included in several international treaties on intellectual property. Signatories of those treaties agree to standardize possible limitations and exceptions to exclusive rights under their respective national copyright laws.
The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) makes decisions on trade disputes between governments that are adjudicated by the Organization. Its decisions generally match those of the Dispute Panel.
A trade war is an economic conflict often resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. If tariffs are the exclusive mechanism, then such conflicts are known as customs wars, toll wars, or tariff wars; as a reprisal, the latter state may also increase the tariffs. Increased protection causes both nations' output compositions to move towards their autarky position. Minor trade disagreements are often called trade disputes when the war metaphor is hyperbolic.
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The Agreement on the Application of Sanitary and Phytosanitary Measures, also known as the SPS Agreement or just SPS, is an international treaty of the World Trade Organization (WTO). It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), and entered into force with the establishment of the WTO at the beginning of 1995. Broadly, the sanitary and phytosanitary ("SPS") measures covered by the agreement are those aimed at the protection of human, animal or plant life or health from certain risks.
The Appellate Body of the World Trade Organization (WTOAB) is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought on by WTO members. The WTOAB can uphold, modify or reverse the legal findings and conclusions of a panel, and Appellate Body Reports, once adopted by the Dispute Settlement Body (DSB), must be accepted by the parties to the dispute. The WTOAB has its seat in Geneva, Switzerland. It has been termed by at least one journalist as "effectively the supreme court of world trade".
Section 301 of the U.S. Trade Act of 1974 authorizes the President to take all appropriate action, including tariff-based and non-tariff-based retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts U.S. commerce. Section 301 cases can be self-initiated by the United States Trade Representative (USTR) or as the result of a petition filed by a firm or industry group. If USTR initiates a Section 301 investigation, it must seek to negotiate a settlement with the foreign country in the form of compensation or elimination of the trade barrier. For cases involving trade agreements, the USTR is required to request formal dispute proceedings as provided by the trade agreements. The law does not require that the U.S. government wait until it receives authorization from the World Trade Organization (WTO) to take enforcement actions, and the President is increasingly focused on enforcing intellectual property (IP) rights under the "Special" 301 amendments but the U.S. has committed itself to pursuing the resolution of disputes under WTO agreements through the WTO dispute settlement mechanism, which has its own timetable.
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The Beef Hormone Dispute is one of the most intractable agricultural controversies since the establishment of the World Trade Organization (WTO).
The Berne Convention for the Protection of Literary and Artistic Works, usually known as the Berne Convention, is an international agreement governing copyright, which was first accepted in Berne, Switzerland, in 1886. The Berne Convention has 179 contracting parties, most of which are parties to the Paris Act of 1971.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It establishes minimum standards for the regulation by national governments of different forms of intellectual property (IP) as applied to nationals of other WTO member nations. TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) between 1989 and 1990 and is administered by the WTO.
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The Fairness in Music Licensing Act increased the number of bars and restaurants that were exempted from needing a public performance license to play music or television during business hours. The bill was companion legislation passed along with the Copyright Term Extension Act in 1998.
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European communities and its member states — tariff treatment of certain information technology products or for short EC - IT Product Dispute (DS376) is a WTO dispute initiated by Japan with European Communities and its member states as respondents. Dispute was initiated on September 28, 2008 and was settled on August 16, 2010, with Dispute Settlement Body recognizing European Union's violations.
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