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ISSUE 25 MARCH – APRIL 2004

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Click on a table of contents entry to go directly to the desired title. To return to the table of contents use Ctrl + Home or Ctrl + End.

MAR. – APR. 2004

NEWS .................................................................. 2 1. COMPETITION................................................................ 2

MEXICO International Interconnection Agreements .......................... 2 2. CONVERGENCE ............................................................ 2

PORTUGAL Electronic Communications Law in Force ..................... 2 SOUTH AFRICA Introduction of Draft Convergence Bill.................... 2

3. DIGITAL SIGNATURES ................................................. 3 ARGENTINA Granting Licenses to Certifying Entities ....................... 3

4. DOMAIN NAMES............................................................ 3 GERMANY Former Prime Minister Opposes Internet Domain .......... 3

5. ELECTRONIC COMMERCE .......................................... 3 AUSTRALIA The Spam Act 2003 (Cth).............................................. 3 GERMANY Typographical Errors in Internet Auctions....................... 4 INDIA Database Creation of Job-Hoppers in BPO Companies ........ 4 LEBANON Preparing Basket of E-Commerce Laws .......................... 4

6. GENERAL DEVELOPMENTS........................................ 4 SWITZERLAND Enforcement of an English Freezing Injunction....... 4

7. INTELLECTUAL PROPERTY ........................................ 5 AUSTRALIA ACIP Report on Business Process Patents .................. 5 FINLAND Supreme Court Decision on Market Court Jurisdiction...... 5

8. MARKET ACCESS ......................................................... 5 UK Government Awards Broadband Framework Agreements .......... 5

9. PRIVACY......................................................................... 6 AUSTRALIA Privacy Bill 2003............................................................ 6 GERMANY Ban on Spy Cameras and Voyeurism............................. 6

10. TARIFFS.......................................................................... 6 CHILE New Tariff Decree for CTC in Local Telephone Service......... 6 GERMANY Illegal Telephone Charges for Hidden Dialers ................ 7

11. TELECOMMUNICATIONS ............................................. 7 CHINA New Security Standard Implemented..................................... 7 INDIA Reforms in Call Center Operations.......................................... 7 MEXICO WTO Resolution on the Telecom Dispute with the US ....... 8 TURKEY Taking Liberties in Telecoms Market .................................. 8

COMMENTARIES ............................................... 9 1. DOMAIN NAMES............................................................ 9

FRANCE The Relaxing of of “.fr” Naming Policy................................ 9 2. INTELLECTUAL PROPERTY ...................................... 10

BRAZIL The Madrid Protocol on International Trademarks ............. 10 CANADA Ruling About Originality and Fair Dealing Standards....... 11

BOOK ................................................................ 12 Internet et e-Commerce en Droit Luxembourgeois .......................... 12

EVENT............................................................... 12 SWITZERLAND Young Lawyers Drafting Competition .................... 12

EDITOR / EDITORIAL BOARD......................... 15 TABLE OF CONTENTS BY COUNTRY ........... 16

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NEWS

1. COMPETITION

MEXICO INTERNATIONAL INTERCONNECTION

AGREEMENTS On 17th March 2004, the Mexican Telecommunications Regulator (the "Cofetel") published in the Federal Official Gazette a resolution that modifies the "International Long Distance Rules" (the "Resolution"). The new rules reduce the conditions that must be contained in international interconnection agreements that are executed between Mexican and foreign operators. With this Resolution, the international interconnection agreements need only satisfy 4 requisites instead of 9. They are: • a recognition of Cofetel's authority to approve the terms of the

agreement; • a stipulation that inbound and outbound traffic can only by routed

through international gateways approved by Cofetel; • a mechanism of automatic renewal and of obligatory dispute resolution

to prevent a possible disruption of the traffic; and • settlement rates that have been approved by Cofetel.

The Resolution additionaly allows Cofetel to authorize the international interconnection agreements indefinitely, instead of on a yearly basis. These modifications are intended to benefit negotiations between Mexican and foreign operators regarding international interconnection. For more information visit: www.cft.gob.mx or please contact: [email protected]

2. CONVERGENCE

PORTUGAL ELECTRONIC COMMUNICATIONS LAW IN FORCE

The Electronic Communications Law, Law 5/2004, of 10th February 2004 (the "Law"), implements a new community framework for the sector in the Portuguese legal system. The Law entered into force on 11th February 2004, exactly one day after its publication, and without having been made available for public consultation. Exception must be made to certain rules that are to take effect later -in particular, the "TMDP", contained in article 106, which will enter into force 90 days after the new Law's publication. Implementation of the Law occurred after a 6-month delay and under the threat of an EU infringement procedure. Even so, the Portuguese enactment of the so-called "99 Review" excluded Directive 2002/58/EC of the European Parliament and of the Council of 12th July 2002, which concerns the processing of personal data and the protection of privacy in the electronic communications sector. The Portuguese Parliament is still discussing a draft of this law, which will revoke Law 69/98, of 28th October. The new Law, designated as "REGICOM," inter alia, reinforces the powers of the national regulator, ICP-ANACOM; materially increases the limit of the applicable administrative fines, ranging from 45 thousand to 5 million euros; creates a municipal tax for the Rights Of Way, called TMDP; and defines the regime of operators' access to the telecommunications infrastructure. Furthermore, it foresees that administrative acts of

ANACOM will be subject to jurisdictional control, with recourse in the administrative courts, and requiring the intervention of three experts. Also important is the fact that the Law regulates use of the public domain and payment of the applicable taxes. As mentioned, municipal taxes for occupying the public domain were replaced by a new municipal tax, the TMDP. This tax is curious in that, despite its being due by virtue of implanting network infrastructures in municipal lands, all fixed operators must pay it, even when they have made no implantation. Another issue worth noting relates to the method of identifying operators with significant market power. The provisions of the new Law put an end to the legal assumption whereby an operator was deemed to have significant market power when its market share in a relevant market -like fixed telephone service, leased lines, interconnection, or mobile networks and services- was above 25%. The new approach makes this concept more flexible, as it is ANACOM's responsibility to define, pursuant to EU regulations, the relevant markets of the sector and the need for special obligations such as cost-oriented interconnection prices. Although ANACOM has not yet defined the relevant markets, on 12th February 2004 the authority issued a decision that defined the new consultation procedures to be followed with respect to the adoption of measures having significant impact on the relevant market. Moreover, the new Law also anticipates a simpler licensing system. In fact, except for individual rights of use of radio frequencies and numbers, which are subject to a specific regime, REGICOM requires only operators to hold general authorizations. ANACOM is expected to adapt the licenses, registrations and authorizations granted according to the revoked laws. For more information please contact: [email protected]

SOUTH AFRICA INTRODUCTION OF DRAFT CONVERGENCE BILL

On 3rd December 2003, the Department of Communications of the Government of South Africa published a draft Convergence Bill (the "draft Bill"). The production of the draft Bill follows the National Colloquium on Convergence Policy, which was held in Johannesburg in July 2003, and represents, in line with similar legislative initiatives internationally, an exciting and positive development for the communications industry in South Africa. The underlying objectives of the draft Bill include facilitating convergence in the broadcasting, telecommunication and broadcasting signal distribution sectors of the South African industry; providing for regulation of communication services in South Africa, which would include broadcasting, telecommunication and broadcasting signal distribution services; providing for the issuance of new licenses for these services and for relevant service providers; and clarifying and augmenting the powers of the Independent Communications Authority of South Africa in order to carry out and fulfill its regulatory functions under a converged communications environment. The enactment of convergence legislation is expected to consolidate the existing legislative and regulatory framework for broadcasting and telecommunications in South Africa and to further promote competition in the provision of, and universal access to, the new technologies and services that convergence will make possible in the future. Publication of the draft Bill merely marks the start of the legislative process, and the Department of Communications has called on all interested parties to make submissions with respect to the draft Bill before releasing a final version, intending to obtain constructive feedback from industry players on the scope and, to an extent, the shortcomings of the draft Bill in its current form. A number of submissions have been received by the Department, and while the response has been largely critical, the inclusive and purposeful nature of the process and the input of those parties directly affected by a converged communications environment should ensure that


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the legislation finally produced will foster a structured and harmonious transition towards convergence in South Africa. Watch this space! For more information visit: www.wwb.co.za or please contact: [email protected]

3. DIGITAL SIGNATURES

ARGENTINA GRANTING LICENSES TO CERTIFYING ENTITIES

As mentioned in previous issues, Argentina enacted its first Digital Signature Law, Act No. 25.506 on 3rd January 2002 (the "Act"), which in turn was complemented by Decree 2628 on 12th December 2002 (the "Decree"). The Act and Decree set the general characteristics that define the validity and use of digital signatures, but the process of granting licenses to certifiers of digital signature was still pending. One year later, in December 2003, the Oficina Nacional de Tecnologías de Información (in reliance on the Presidency of the Cabinet of Ministers) issued a preliminary draft that provides the requirements for granting and terminating digital signature certifier's licenses. The document was posted on the Internet for public consideration and comment. The preliminary draft states, among other things, that: • the licensed certifiers shall be entities, public contract registries, or

public agencies domiciled in Argentina; • licensed certifiers shall maintain an online archive of current and

terminated certificates; • licensed certifiers shall keep all documentation and information related

to certifications issued for ten year from the expiration or termination of such certificates;

• licensed certifiers shall be subject to audits pursued by the Oficina Nacional de Tecnologías de Información;

• any applicant for a license shall pay the application fee of $30.000 (thirty thousand pesos, or approximately ten thousand American Dollars);

• the licensed certifiers shall be responsible for damages cause by their negligence; no limitation of liability, will be accepted;

• licensed certifiers might be subjected to administrative fines (from $10.000 (ten thousand pesos) to $500.000 (half a million pesos), or approximately three thousand five hundred American Dollars to one hundred and seventy thousand American Dollars, depending on the severity of the infringement.

The deadline for providing comments on the preliminary draft was 27th February 2004. During the coming months the final requirements related to granting or termination of licenses for certifier of digital signature will be issued and become binding. For more information visit: http://www.pki.gov.ar/ or http://www.pki.gov.ar/images/stories/documents/20031230_Disposicion_de_Licenciamiento_v1.1.doc or please contact: [email protected]

4. DOMAIN NAMES

GERMANY FORMER PRIME MINISTER

OPPOSES INTERNET DOMAIN The German Federal High Court recently dismissed a claim brought by Kurt Biedenkopf, the former prime minister of the German state of Saxony, to protest the use of his name as a web address (for reasons not yet published). The politician demanded that DeNIC, the competent authority for registering domain names with the ending ".de," completely close the web address "www.kurt-biedenkopf.de." Biedenkopf had not intended to register this address for his own purposes. The lower court enjoined the bearer of the domain name -who himself had a different name- from using the name Kurt Biedenkopf. The question remaining before the Federal High Court was whether Biedenkopf could compel DeNIC to close the domain name with respect to interested persons in the future. Biedenkopf asserted a violation of the right to the use of a name. DeNIC referred to an earlier decision by the Federal High Court, holding that the chronological order of the registration of the domain name is the deciding factor. Biedenkopf appealed to the Federal High Court with the intent to reach a fundamental decision, because, in connection with the costs involved, the registration of every possible variation of the domain name is unreasonable for private persons. The Federal High Court apparently did not agree with this reasoning. For more information visit: www.heise.de or please contact: [email protected]

5. ELECTRONIC COMMERCE

AUSTRALIA THE SPAM ACT 2003 (CTH)

Australia now has anti-spam legislation that regulates the sending of one or more unsolicited commercial electronic messages. Persons or businesses who send commercial electronic messages, such as email or SMS, to or from Australia now have until 11th April 2004 to ensure that their procedures comply with the Spam Act, or else face hefty penalties. The Spam Act reaches far beyond the typical notion of "spam," which we tend to think of as unsolicited bulk email, often associated with scams promising instant wealth or physical enhancement. Rather, the Spam Act prohibits sending one or more "commercial electronic messages" unless certain exceptions apply. The Act also regulates the content of "commercial electronic messages" and the use of "address-harvesting" software and "harvested" address lists. Now is the time for companies doing business in or with Australia to review whether they have the consent of all electronic addressees in their databases to send them commercial electronic messages and ensure the content of the messages complies with the Act. It is also the time to put into place quality control procedures for future additions to databases. Those organizations that send commercial electronic messages either to or from Australia, including most Australian businesses that supply products or services, will need to undertake a compliance audit before 11th April 2004. Business may wish to tie this process in with related compliance activity, for example in relation to compliance with Commonwealth, State and Territory privacy legislation, the SMS code, and telemarketing legislation.


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For more information visit: www.claytonutz.com or please contact: [email protected]

GERMANY TYPOGRAPHICAL ERRORS

IN INTERNET AUCTIONS The Oldenburg Regional Court of Appeals (File No. 8 U 136/03) recently decided a case on Internet auctions. According to the court's view, a seller is not bound to a particular offer when he or she commits an error, including but not limited to an error in numerical order, when designating a minimum bid at an Internet auction. The contract of sale is to be regarded as void as soon as the seller makes the typographical error known to the buyer. In the case at bar, the seller offered Chinese furniture worth EUR 30.000 for a minimum bid of EUR 100, instead of EUR 1000, due to error. The buyer insisted that a contract had been formed in the amount of EUR 100 and demanded delivery of the furniture. When the seller refused, the buyer brought suit and demanded EUR 500 in damages. The court dismissed the claim, stating that a contract between the parties had not been formed due to the clear difference of understanding concerning the price of the goods. For more information visit: www.heise.de or please contact: [email protected]

INDIA DATABASE CREATION

OF JOB-HOPPERS IN BPO COMPANIES Business Process Outsourcing ("BPO") has been quickly gaining ground in India. In this highly competitive market, employees of BPO companies often shuffle among various employers. BPO companies are typically unaware of these movements by their former employees once they have left, which creates potential confidentiality problems. Although India does not now have data protection laws in place, customers' confidential data is protected contractually. To safeguard the interests of the employers, however, the National Association of Software and Service Companies ("NASSCOM") has initiated the development of a job-hoppers list for the BPO industry. BPO companies will have access to the information offered in the database, which would, inter alia, contain details of employees who have misused client information or who have quit their jobs without providing any reasonable excuse. NASCOMM created and adopted the database due to a recent confidentiality breach in a BPO company based out of Bangalore and dealing with medical insurance. With such a database, former employers will be able both to check on where their employees have relocated and to monitor any dissemination of confidential information. BPO companies are highly concerned about protecting confidential customer information and customer privacy since their customers are extremely sensitive and concerned about their personal information being shared. Therefore, the database will help track delinquent employees and ensure that the information is well protected. The database will also help BPO companies formulate their recruitment strategies and provide them with a better understanding of the employees they plan to recruit. Finally, it is hoped that the log of the job-hoppers maintained by the database will result in improved career planning for employees who abide by the employer-employee code of conduct. With the groth in the BPO market, this step by NASSCOM will help secure India as a favored destination by comforting foreign companies about privacy issues when outsourcing to India. For more information please contact: [email protected]

LEBANON PREPARING BASKET OF E-COMMERCE LAWS

In 1999, the European Union and Lebanon signed a Financing Agreement for the Investment Planning Programme (the "IPP"). The IPP's main objectives are to rehabilitate, expand and modernize public facilities and services in selected infrastructure sectors, which traditionally have been under the responsibility of the public sector. Therefore, the IPP contributes to both the economic recovery and the social development of Lebanon. The IPP is composed of six modules, or Management Support Consultancies, each of which provides assistance to a related beneficiary Lebanese institution or ministry. Each Management Support Consultancy is to be managed by one of the Lebanese ministries or by an institution entrusted with the planning and implementation nation-wide of sectorial infrastructure investment programmes. In this respect, and as one of the Management Support Consultancies modules, a project for E-commerce facilitation is already in process, which will assist and support the Ministry of Economy and Trade. In accordance with the Tender document issued by the Lebanese authorities, the E-commerce facilitation project will involve the development of five inter-related activities, as follows: • an assessment of E-business activity and expertise in Lebanon; • support initiatives in developing a regulatory and legal framework for

online transactions through the revision of the existing legislation and decrees in Lebanon and the drafting of texts of each proposed legislation;

• capacity building for institutions involved in the promotion and delivery of online transactions, through policy guidance and training for legal professionals on the issues of E-commerce;

• guidance and awareness to SMEs through the dissemination of information concerning best practices, legal issues and policy developments; and

• awareness and pilot projects that will demonstrate the attractiveness of E-business practices to SMEs and consumer groups.

• This project will regulate several subjects and, therefore, among those additionally constituting part of the Basket of Laws on E-commerce are: E-signature, electronic online contracts, consumer protection, intellectual property rights, data privacy, cybercrime, E-payments and taxation.

Following the award of a contract through a Tender procedure, the works have already been initiated and the project is expected to be implemented over a period of eighteen months. For more information please contact: [email protected]

6. GENERAL DEVELOPMENTS

SWITZERLAND ENFORCEMENT OF AN ENGLISH

FREEZING INJUNCTION In a decision dated 30th July 2003, BGE 129 III 626, the Swiss Federal Supreme Court (the "Court") ruled on the enforceability in Switzerland of a Freezing Injunction that emanated from an English court. The Applicant, a Turkish citizen, submitted his claim before the Court against a decision of the Zurich Court of Appeals, which had granted the enforceability of the English Freezing Injunction upon the request of an American company. In particular, the Applicant claimed that the Freezing Injunction was unenforceable in Switzerland due to an infringement of his right to be heard. He claimed that he was not heard before the Court with regard to a


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later amendment to the Injunction, which had granted the American company the explicit right to seek an order of a similar nature from the District Court of Zurich. In the initial injunction, the English court granted the freezing of the assets worldwide, but restricted the American company to not seek to enforce the injunction in any country outside of England and Wales without the court's permission. The Court had to establish whether granting the enforceability of an English provisional measure was possible based on the Convention on Jurisdiction and the Enforcement of Judgments in Civil or Commercial Matters (the "Lugano Convention," held on 16th September 1988), a convention parallel to the Brussels Convention that was in force between EU member states. In its decision, the Court reiterated the jurisprudence of the ECJ established in Denilauler v. Couchet (21st May 1980), Klomps v. Michel (16th June 1981), and Brennero v. Wendel (27th November 1984) with regard to the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil or Commercial Matters and Council Regulation (EC) No 44/2001 of 22nd December 2000, which replaced the Brussels Convention everywhere but Denmark as of 1st March 2002. The Court stated that, based on the Lugano Convention, provisional measures emanating from a court of a member state are enforceable in another member state if the debtor has had the opportunity to be heard before the deciding court. Ex parte provisional measures, or those granted without having heard the debtor, are therefore not deemed to be enforceable under the Lugano Convention. In the case at issue, however, the Freezing Injunction was granted in an ex parte proceeding. The Court held that the Applicant’s right to be heard had not been infringed and the Freezing Injunction was thus enforceable. The Court argued that, firstly, with regard to the initial Injunction, the Applicant was granted a retrospective right to be heard insofar as he had a right to apply to the court to vary or discharge the order. Secondly, although the Applicant was not given a retrospective opportunity to be heard with regard to the amendment to the Injunction, his procedural rights had not been infringed since the initial Injunction foresaw the possibility to get permission from the court to enforce the Injunction outside of England and Wales. In addition, the Court stated that the condition necessary for Article 24 Lugano Convention to apply, as established by the ECJ in the Van Uden case (Van Uden Maritime BV v. Deco-Line, 17th November 1998) -i.e., a real link between the object of the measure and the jurisdiction of the deciding court- only applies if the court’s jurisdiction is not based on the Lugano Convention, but on national domestic law. As long as the jurisdiction of the court called to grant a provisional measure is established by Article 2 or Articles 5 to 18 of the Lugano Convention, a real linking between object of the measure and jurisdiction of the deciding court is not required. In summary, English Freezing Injunctions are enforceable in Switzerland if debtors are given, at least, a retrospective opportunity to be heard before the English court. For more information please contact: [email protected]

7. INTELLECTUAL PROPERTY

AUSTRALIA ACIP REPORT ON BUSINESS PROCESS PATENTS The Australian Advisory Council on Intellectual Property (the “ACIP”) recently released its Report on a review of the patenting of business systems. The ACIP consulted with a range of industry and professional groups and found that, despite certain concerns, there was little hard evidence of patents for business systems that either encourage or suppress innovation in Australia.

Making business systems ineligible for patent protection would require fundamental changes to Australian patent law, which could have adverse impacts on the more traditionally accepted patents. Consequently, the ACIP recommended that business systems remain patentable for the time being, but that the issue continue to be closely monitored. The ACIP proposed further improvements to the assessment processes used by IP Australia, the federal government agency responsible for patents. The ACIP also recommended that information available to the public be improved to better assist the business community in managing this new area of intellectual property. Although most business system patents concern inventions that use computer technology, business systems can come in a wide variety of shapes and sizes. They range from ways of marketing products and transferring funds, to the training and organization of personnel. The Australian government will now consider the ACIP’s recommendations and respond formally. A copy of the report is available at www.acip.gov.au. For more information visit: www.acip.gov.au or please contact: [email protected]

FINLAND SUPREME COURT DECISION

ON MARKET COURT JURISDICTION On 20th January 2004, the Supreme Court issued its first ruling (KKO:2004:4) on an appeal matter from the Market Court. In the initial action, the Market Court had prohibited, under the Unfair Business Practices Act, a limited partnership company from marketing its product in a package identical to a package used by its former partner. The Market Court, however, had held in its decision that it did not have jurisdiction to investigate claims that were based on trademark and copyright legislation. Furthermore, the Market Court had held that it could not assess issues regarding the interpretation of agreements. Accordingly, the initial action was partly dismissed. In its decision, the Supreme Court held that in cases where parties invoke trademark, copyright and contract law as grounds for their claims, the Market Court may consider these matters as preliminary questions when assessing the unfairness of a business practice. The Market Court therefore has jurisdiction to investigate all such claims. This decision is likely to force the Market Court to adopt a more holistic approach when assessing cases based on the Unfair Business Practices Act. For more information please contact: [email protected]

8. MARKET ACCESS

UK GOVERNMENT AWARDS BROADBAND

FRAMEWORK AGREEMENTS As part of the UK Government's Broadband Aggregation Project, the UK Department of Trade & Industry awarded, on 5th March 2004, 17 framework agreements for the provision to public sector purchasers of broadband services. The Broadband Aggregation Project aims to bring together the demands for broadband across the UK public sector, including demands from the National Health Service, schools, and other public sector service providers. Nine regional aggregation bodies and one national aggregation body have been established in England to facilitate aggregation across this sector. Each body is charged with aggregating public sector broadband demand in the regions and obtaining from relevant suppliers the required broadband services.


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The framework agreements ensure that the selected providers are available to meet the combined broadband requirements of the UK’s public sector. In keeping with the subject matter of the agreements, the regional aggregation bodies are encouraged to use an online electronic auction facility made available by the UK Office of Government Commerce to place orders for combined broadband services. For more information please contact: [email protected]

9. PRIVACY

AUSTRALIA PRIVACY BILL 2003

The Privacy Amendment Bill 2003 (the "Bill") was tabled in Parliament on 3rd December 2003. If enacted, the Bill would amend the Privacy Act 1988 (Cth) in the following ways: • the Bill would clarify that National Privacy Principle (the "NPP") 9,

relating to trans-border data flows, applies to personal information about persons who are not Australian residents or citizens.

• under the Bill, the Privacy Commissioner would no longer be barred from investigating complaints about breaches of access and correction rights where the complainant is not an Australian resident or citizen.

• the Bill would extend matters that may be covered in an organization's privacy code.

• the Bill would correct an unintended limitation on the provision of superannuation services to Commonwealth employees.

For more information visit: www.claytonutz.com or please contact: [email protected]

GERMANY BAN ON SPY CAMERAS AND VOYEURISM

Many private companies have already banned from their premises cell phones with integrated digital cameras because of their fears of industrial espionage. Voyeurs use these seemingly inconspicuous cell phones to take pictures of persons without their consent, and often capture them in situations that are unpleasant or downright embarrassing. Although a public ban on cameras is not likely, the German government is determined to hold voyeurs, who take pictures of persons in private or intimate situations, criminally liable. After intensive discussions and hearings, legal experts within the Federal Legislature proposed to enact a special provision for increased protection of the privacy rights of citizens against unauthorized the unauthorized taking of still photos or movies. By now all parliamentary groups have agreed on a common draft for amending the German Federal Penal Code. According to this draft, persons who take unauthorized pictures, or who make unauthorized movies of other persons in a dwelling house or otherwise protected premises, are punishable by law and can be fined or sentenced to prison for up to one year. The proposed provision will amend § 201 of the German Federal Penal Code, which already places criminal sanctions on secret audio recordings but does not include secret photographs or movies. The new provision intends to hold criminally liable not only those persons who take unauthorized pictures or movies, but also those who transfer them. The inclusion of unauthorized transfer targets the growing number of websites that display unauthorized pictures of persons and the video streams that can be circulated through use of the Internet. For more information visit: www.heise.de or please contact: [email protected]

10. TARIFFS

CHILE NEW TARIFF DECREE FOR CTC IN LOCAL TELEPHONE SERVICE

As a general rule, under Chilean telecom law and regulations, the tariffs or fees for public telecom services ("PTS") and intermediate telecom services ("ITS") may be freely established by the respective PTS or ITS providers. However, the Antitrust Commission may issue a resolution regarding local telephone services and/or long distance services (excluding mobile telephone service, signaling transmission, and/or switching services provided as intermediate services or as private circuits), stating that the conditions prevailing in the market for such telecom services are not sufficient to secure free competition and, therefore, to allow the existence of a free tariff system in the market. Should this happen, the tariffs or fees of the telecom service or services referred to in the Antitrust Commission's resolution would be jointly set by the Ministry of Transport and Telecommunications and the Ministry of Economy of Chile (the "Ministries"), through the issuance of the corresponding tariff decree. This is precisely the case of Compañía de Telecomunicaciones de Chile S.A. (the "CTC"), a subsidiary of Telefónica of Spain, which has a monopoly in many tariffs areas of local telephone service and nearly 80% of the Chilean local telephone service market share. On 4th May 2004, the Ministries will set the tariffs of CTC for the period 2004-2009. In connection with the tariff setting, the CTC has long been trying to obtain from the Antitrust Commission a statement that there is no effective monopoly in the relevant market and, therefore, requests to be released from the tariff setting system. Because their strategy has been unsuccessful so far, starting last year the CTC has been requesting from the Ministries a substantial increase of the relevant tariffs. The Undersecretary of Telecommunications (the "Subtel"), however, in its final report previous to the issuance of the corresponding tariff decree (which is considered a strong signal of what is going to be the Ministries final position to be contained in such decree), based on an "efficient company" model with a capital cost rate of 8.17% (lower than the capital cost rate of 13.74% proposed by CTC during the current setting tariff procedure and also to the capital cost rate of 10.8% used in the last tariff setting procedure for the period 1999-2004), has surprisingly proposed an important reduction of the relevant tariffs (approximately 19% on the local telephone service fixed charges and 27% on the "servicio local medido," or cost per second). Although there are some advantages for CTC in the Subtel's report (i.e., the interconnection access charges increased in approximately 8.6%; a pre-paid system for local telephone service has been established for the first time, etc.), these results are far from what CTC expected from this tariff setting procedure. In consideration of the fact that Subtel's report is not definitive, the CTC has requested a review of the matter by a technical panel. This manner of review is allowed under the tariff setting procedure and the panel is to include three experts -one appointed by the Ministries, one by CTC, and one by mutual agreement. Although the panel's opinion is not binding on the Ministries' final decision, it is carefully considered by the Ministries before their issuance of the tariff decree. Given this, the market is expecting a slight change of the tariffs to favor CTC as the last step of the tariff setting procedure, but not a substantial increase of those already proposed by Subtel's report. In summary, the Subtel's report is an important signal to the market of the Government criteria in this matter which generally seeks to reduce tariffs in order to increase competition in the Chilean telecommunications market, and to facilitate the local loop unbundling. The end result of all of this will likely benefit the consumers.


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For more information please contact: [email protected], [email protected] or [email protected]

GERMANY ILLEGAL TELEPHONE CHARGES

FOR HIDDEN DIALERS The German Federal High Court recently decided a telecommunications case on excessive rates caused by hidden dialers (File No. III ZR 96/03). Under the court's opinion, a telephone company customer is not obligated to pay telephone charges for dialing a 0190- or 0900-number, if a program previously installed on the customer's personal computer has secretly dialed the number. The court did not consider this situation a breach of the duty of care by the customer. In the case at bar, the Berlin-based telephone company Berlikomm billed a customer with telephone charges amounting to approximately EUR 9.000. While surfing the Internet, the customer's sixteen-year old son had downloaded a program to his personal computer that promised increased download rates. The program reconfigured the computer's dial-up configuration in such a way that a 0190-number was used for every dial-up connection after the installation. Even after the respective folder containing the files had been deleted, the reconfiguration stayed the same. The dial-up using the 0900-number occurred from May until June of 2000. Because Berlikomm had billed the customer late, the customer had not discovered the excessive charges and thus could not have taken any counter measures. The reconfiguration of the dial-up connection had been undetectable during standard use of the computer. The lower court dismissed the claim, holding that Berlikomm could only bill telephone charges that would have been generated if the customer had used standard access to the Internet. Berlikomm was held responsible for the acts of the operator of that particular value-added number. Although the contract between the telephone company and the customer did not contain a controlling provision for this special case, the court -by means of contract interpretation -concluded that, as long the customer was not to be held responsible for the acts of third parties, the customer was not obligated to pay for phone charges that he incurred while someone other than the parties to the contract used his connection. The Federal High Court explained further that the telephone company has its own economic interest in using value-added numbers for dial-up connections, because it only has to pay a part of the increased phone charges to the companies that operate the value-added numbers. It is therefore reasonable to hold the telephone company liable for improper use of those numbers instead of the customer. The Federal High Court expressly negated a breach of the duty of care by either the customer or her son. There was no apparent reason to take protective measures, because the dialer could not be discovered. Furthermore, anticipatory protective measures against hidden dialers cannot be expected. For more information visit: www.lexisnexis.de or please contact: [email protected]

11. TELECOMMUNICATIONS

CHINA NEW SECURITY STANDARD IMPLEMENTED

On 1st December 2003, the Standardisation Administration of China adopted a new security specification standard for wireless products, entitled Wired Authentication and Privacy Infrastructure (the "WAPI"). The new policy was developed in China and is not used anywhere else in the world. The Chinese Government is now additonally insisting that all

computer and chip manufacturers and mobile phone manufacturers that seek to enter the Chinese market must adopt the new WAPI standard for encrypting wireless communications. Similarly, foreign manufacturers must use the encryption software and make their products adhere to the set standards with the aid of just 11 designated Mainland companies. China's new policy has raised fears among foreign companies, ranging from the loss of intellectual property to price gauging. Those manufacturers who had their products imported into or manufactured in China before 1st December 2003 may continue to use their own security standards until 1st June 2004, upon which time they will have to support WAPI. The Chinese Government is adamant that those maufacturers who ignore the implementation of WAPI after this date will no longer be allowed to use and sell those products in Mainland China. In essence, by prohibiting gear that does not use WAPI, China is creating a huge obstacle for international technology manufacturers who look to enter the Chinese market while clearing the way for domestic Chinese manufacturers to dominate. The decision has caused a stir in technology companies, as many international manufacturers believe that they will not be able to conform to China's standard. For example, the company INTEL has been unable to develop a technical solution that fits WAPI into its new existing product, the Centrino Chip. After spending USD 300 million last year to promote this new product, INTEL has not claimed that they will stop sales of the product altogether in China. This has not deterred China, however, which is sticking firmly to its June 2004 deadline for adopting the new standard. Another example of the struggles that overseas companies face with regard to adopting the new standard is seen by mobile phone giant Nokia's latest product, the 9500 Communicator, which will not entering the Chinese market since it cannot support the new standard and will not have enough time to develop a solution before June 2004. This has dealt a severe blow to Nokia, which had been targeting businesses for the new product that they believed had great revenue potential. For more information visit: www.chinatechnews.com or please contact: [email protected]

INDIA REFORMS IN CALL CENTER OPERATIONS

In a move designed to enhance the functioning of call centers while providing Indian consumers with international grade services, the Department of Telecommunications has sanctioned various benefits to call centers. Some of the major reforms given to the call centers include: Reversing a previous ban, companies with an annual turnover of above Rs. 5000 million, or a combined turnover with promoters that exceeds Rs. 10000 million, will now have the benefit of using common infrastructure for domestic as well as international call centers. The company will need to submit a certificate from the software vendor used to run the call center proving that the software is capable of bifurcating the EPABX / Server into two separate environments for the domestic and international call centers; that it will not allow flow of traffic to and from the Public Switched Telephone Network (the "PSTN"), at the Indian end, and the International Private Leased Circuits (the "IPLC"); and that the system logs are tamper-proof. Because the international call centers were permitted duty-free imports of infrastructure and equipment, the government did not allow the call centers to use the equipment for domestic purposes. Furthermore, the government had been skeptical about letting international call centers use this benefit since it feared that such leeway would lead to illegal national long-distance and international long distance calls bypassing the licensed operators. Domestic call centers have now been permitted to use Integrated Services Digital Network ("ISDN") to back-up leased lines. This move aims to provide better resilience for the systems used to run the domestic call


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centers. Previously, use of ISDN was prohibited and call centers had to depend on a single International Long Distance ("ILD") calling facility. Having another ILD line for backup proved to be extremely expensive due to steep licensing fees. The current liberalization should prove such call center operations. Domestic telemarketing call centers, without a leased line facility, are now able to make outgoing calls without posting any bank guarantee. Such permission, however, is conditioned upon the telemarketing company not impinging on the privacy of the people called, nor disturbing or causing annoyance to them in any manner. To ensure this, the government will allow telemarketing calls to be made only during normal working hours and, in the case of people who do not wish to be called, the company must enter their numbers in a database and ensure that such people are not called in the future. The liberalization should provide better returns on investments for companies that have invested in call center facilities. Companies will now be able to use the same call center with state-of the-art facilities, global practices, and employees trained with customer service delivery processes for servicing domestic consumers. These call centers were previously active only during the night, since most of the call centers predominantly served only international clients. However, now that the call centers will be permitted to service domestic consumers as well, the reforms will help reduce attrition levels as employers will be able to move employees between night and morning shifts. Some of the above benefits are already available in countries such as the Philippines, China and Malaysia. Once these reforms have been adopted, India will be at par. These reforms are another step forward for cementing India's status as a leading Business Process Outsourcing and call center services destination. For more information please contact: [email protected]

MEXICO WTO RESOLUTION ON

THE TELECOM DISPUTE WITH THE US On 12th March 2004, the WTO issued its report on claims that the USTR opposed Mexico on the topic of telecommunications services. Basically, the decision ruled out that the rates and the settlement mechanism of the international interconnection tariffs, as well as the lack of regulation of re-sellers, do not comply with the compromises assumed by Mexico. On the other hand, the WTO recognized as illegal the bypass carried out by US carriers. Whether the US and/or Mexico appeals the decision, a new regulation is expected to pass in the near future concerning the mechanisms for settling international interconnection tariffs, as the Mexican Telecommunications Regulator has recently declared, and possibly concerning the establishment of re-sellers authorized to provide telecommunication services. For more information visit: www.cft.gob.mx or please contact: [email protected]

TURKEY TAKING LIBERTIES IN TELECOMS MARKET

Turk Telekom's monopoly over voice telephony services and the establishment and operation of all telecommunications infrastructure expired on 31st December 2003. The legal framework to enable other market players to provide certain telecommunications services, which are no longer within the scope of Turk Telekom's monopoly, was expected to be finalized before that date. Although the expiry of Turk Telekom's monopoly was known as early as the year 2000, the government was

somewhat reluctant and slow-paced in enacting the necessary legislation. As of the first quarter of 2004, there is still much to be done before a fully liberalized telecommunications market is achieved in Turkey. As we reported to you in previous issues of "the l.i.n.k.", among the efforts that have already been made are the issuance of Interconnection and Access Regulation, dated 23rd May 2003; the Communiqué enabling the issuance of data transmission licenses; and the draft Authorization Regulation (the "Draft Regulation"), which remains to be a draft. Below is a summary of legislation recently enacted in furtherance of the same liberalization efforts. On 29th December 2003, the Council of Ministers issued Decree No: 2003/6689 (the "Decree") on minimum fees for the "Joint Usage Wireless Services" and "Long Distance Telephone Service" (the "LDTS"). The determination of minimum license fees for the LDTS just two days before the expiration of Turk Telekom's monopoly over voice services was very symbolic, albeit insufficient, for opening the market, since the underlying Draft Regulation that would enable the potential entrants to hold a license for providing voice services is not yet finalized by the TA. Accordingly, the TA's failure to issue the necessary licenses maintains the de facto monopoly of Turk Telekom over voice services. The LDTS is regulated in draft form and is expected to be included as an Annex to the Draft Regulation. Pursuant to the draft Annex, LDTS operators would be able to provide services by carrier pre-selection (Type A), by call-based carrier selection (Type B), and by using a 10-digit number to be allocated by the TA (Type C). These operators would be expected to be licensed for 15 years, and would be able to connect various kinds of traffic generated by PSTN, GSM, and other networks to the national and/or international networks over any and all types of infrastructure and by any and all types of technology. In an effort to make the draft Annex technology neutral, the Voice Over Internet Protocol ("VoIP") is allegedly not specifically addressed therein. However, the TA is of the opinion that VoIP operators would be treated as Type C operators, despite critics of the market players who have difficulty linking the two concepts. Furthermore, in an effort to clarify access to and interconnection of facilities, the TA issued a Communiqué on 31st December 2003 regarding the Principles and Procedures on Co-Location and Facility Sharing (the "Communiqué"). The Communiqué aims to facilitate the entrance of new operators to the telecommunications sector as well as to both optimize resources and minimize investment and service costs. Additionally, on 26th February 2004, the TA issued the Numbering Regulation (the "Regulation"), which initially had been planned to enter into force by November 2003. Although the Regulation imposes an obligation on operators to provide number portability, the subscribers will not be eligible to benefit from this important liberalization facilitator until the TA enacts necessary secondary legislation. Finally, we note that partial liberalization in the Turkish telecommunications sector had begun as early as 1994 when two private firms, Turkcell and Telsim, were given the rights to offer GSM services through revenue sharing agreements with Turk Telekom. In 1998, the government sold the two operators' licenses, by means of a concession agreement, to operate their GSM900 networks for 25 years. As of the first quarter of 2004, the TA has issued licenses and/or general authorizations for certain services such as Internet, satellite telecommunications, satellite platform, GMPCS mobile telephony and data transmission services over fixed lines. Since the basic tenet of the Turkish telecommunications law is that no person may provide telecommunications services without obtaining a license -currently, although there is not any regulatory monopoly over any telecommunications service- the potential operators cannot enter into certain markets such as voice mobile virtual network operation ("MVNO"), due to TA's failure to issue secondary legislation regarding licenses. In addition to an explicit licensing regime, the potential entrants hope to see a working interconnection system where both price and non-price terms of interconnection are clearly set forth by the TA.


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This considerable delay in introducing secondary legislation in Turkey has hampered the pace of liberalization. Current debates focus on whether liberalization efforts have occurred so slowly due to the ongoing privatization of Turk Telekom. The head of the TA has declared that a fully-liberalized telecommunications sector with adequate legal and regulatory provisions would in fact support a successful privatization of Turk Telekom, whereas potential entrants to the telecommunications market fear that the government has been consciously slow to implement a legal framework that will promote entry into the market in order to avoid decreasing the value of Turk Telekom's shares. The sequence of privatization of the incumbent operator and the liberalization of the telecommunications sector continues to be discussed throughout the world, and the end result of this long debate in Turkey remains to be seen. For more information visit: www.tk.gov.tr or www.oib.gov.tr or please contact: [email protected]

COMMENTARIES

1. DOMAIN NAMES

FRANCE THE RELAXING OF OF “.FR” NAMING POLICY

by Céline MUTZ and Sabine LIPOVETSKY ([email protected]; [email protected]),

Kahn & Associés

In a press release dated 7th January 2004, the French Association for Internet Naming in Cooperation ("AFNIC," or the "Association Française pour le nommage Internet en Coopération") announced a relaxing of the ".fr" naming policy. In particular, AFNIC aims to suppress the so-called "right to name" ("droit au nom"), i.e., the rule under which only entities having a legal existence or a registered trademark on the French territory may register a ".fr" domain name.

1. CONTEXT The rules pertaining to the assignment of ".fr" domain names have always been very restrictive. AFNIC applies the "right to name" for the time being, and thus ".fr" domain names can only be owned by: • legal entities having a SIREN/SIRET number. A company must

provide a "K Bis" excerp while other organizations must communicate an identifying entry in the INSEE ("Institut National de la Statistique et des Etudes Economiques") directory;

• entities owning a registered, not only filed, trademark in France, provided that the trademark corresponds to the domain name;

• entities which are not registered with the INSEE and created by law or decree, or registered with a professional syndicate, if they provide the law, decree or registration form issued by the competent authority; and

• associations identified in the INSEE directory. This system ensures a very low rate of disputes relating to the assignment of domain names. On the other hand, however, its rigidity prevents entities from filing such domain names, and therefore the total amount is fairly low: approximately 180,000 ".fr" names, as compared to approximately six million ".de" names. Furthermore, in view of the creation of a new Registry (the "Eurid") that will be entrusted with the organisation, administration, and management of the .eu Top Level Domain, AFNIC might fear that the registration of ".fr" will decrease even more. Therefore, AFNIC has been working on a project for relaxing the ".fr" naming policy, which is expected to be implemented in May 2004.

2. CONTENT OF THE NEW ".FR" NAMING POLICY The new policy developed by AFNIC concerns issues including: (i) conditions of ".fr" access, (ii) control policy, and (iii) resolution of disputes. Conditions of ".fr" access All persons identifiable online in public and national databases (businesses, artisans, associations registered with the INSEE, trademark owners, etc.) may obtain any domain name without such name having to appear on any document. These databases are those of the National Council of Clerk's Offices ("Conseil National des Greffes"), the National Institute of Industrial Property ("INPI," or the "Institut National de la Propriété Industrielle"), and the INSEE. In a few months, this possibility will also extend to all natural or legal persons that are not identifiable in public databases, such as individuals, associations not registered with the INSEE, etc. These entities or individuals, however, will still need to have a legal existence in France. Finally, the new naming policy provides for the registration of a ".fr" domain name on the basis of a trademark that is filed, if designating France, even if it is not yet registered. Moreover, it will be possible to register a domain name by choosing one or several elements of a French trademark, and not necessarily a domain name identical to such trademark. Control policy Until now, AFNIC has strictly controlled the identity of applicants before proceeding to any registration. Under the new naming policy, such control will still be systematic, but it will occur only after registration. Any domain name that does not comply with the rules at the time of control will be suspended and removed if the applicant cannot be identified in France. In addition, AFNIC seeks to implement a system that allows the source of applicant's identification to be verified. In particular, it intends to display on its database "whois" links allowing visitors of ".fr" web sites to access to the information included in the public databases as regards these sites. Due to such control after registration, an automatic registration system of ".fr" domain names, without any paperwork, will be implemented in a near future. Resolution of disputes Traditional recourse to the French courts is available in order to resolve disputes. In addition, AFNIC will attempt to fully inform the owners of ".fr" names of the existence of "dispute resolution centers."

3. LEGAL FORCE OF THE ".FR" NAMING POLICY The effectiveness of AFNIC's ".fr" naming policy results from French case law (Conseil de la Concurrence, 9th June 2000; Tribunal de Grande Instance of Versailles, 3rd October 2000; Tribunal de Grande Instance of Nanterre, 18th November 2002) and can hardly be challenged. A bill currently under discussion at the French Parliament ("projet de loi pour l'économie numérique") provides that the Minister of Telecommunications shall appoint the entities in charge of allocating and administering domain names corresponding to the national territory. These entities shall proceed to allocating domain names in the general interest, according to non-discriminatory public rules, ensuring that the applicant respects intellectual property rights. Should this bill pass, the legal impact of the ".fr" naming policy would be reinforced. In conclusion, all things considered, it appears that ".fr" extensions should become flexible, open, and subject only to the territoriality rule. For more information please contact: [email protected]; [email protected]


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2. INTELLECTUAL PROPERTY

BRAZIL THE MADRID PROTOCOL ON

INTERNATIONAL TRADEMARKS by Raphael de CUNTO

([email protected]) Pinheiro Neto - Advogados

INTRODUCTION Discussions are currently taking place as to whether Brazil will sign the Madrid Protocol (the "Protocol") on international trademark registration. The talks seem to repeat the situation experienced by this country at the time it signed the Madrid Agreement (the "Agreement"), along with another 19 countries, on 14th April 1891. The Brazilian Government later denounced the Agreement in December 1934 as being unfavorable to the industrial and commercial interests that prevailed at the time. The Protocol is a modernized and simplified version of the Agreement (still in effect), and resulted from negotiations that were held between member parties on 27th June 1989. Although both the Agreement and the Protocol have the same basic principles, they differ on points such as official fees, the term in which each country may decide to grant registration and the manner of communication between the various countries. Like the Madrid Agreement, the Protocol provides for international trademark registration. The Protocol permits an applicant, under a single application for registration from a country of origin, to register his or her trademark in several or all member countries, in accordance with the option made upon filing the original application for registration. On general lines and in due proportion, the Protocol is similar in purpose to the Patent Cooperation Treaty (the "PCT"), which was enacted in Brazil under Decree 81,742 of 31st May 1978, and which permits a patent to be granted in several countries based on one patent application filed in one country of origin. Because of substantial changes that have made it more practical, several prominent countries such as Germany, Japan, England, France and Spain, have already agreed to be bound by the Madrid Protocol, plus another 50 or so countries. The United States, which has not yet signed the Protocol, is expected to do so within the next two years. All indications suggest, however, that the matter will certainly be included in the negotiations to form the proposed Free Trade Agreement of the Americas (the "FTAA").

THE QUESTION OF ADVISABILITY OF BRAZIL'S SIGNING THE PROTOCOL

Discussions regarding international trademark registration were revived because of the globalization process, which has increasingly demonstrated the need for a streamlined trademark protection mechanism in various countries. The lack of protection enables indiscriminate use of trademarks by unauthorized persons, and also makes it impossible for holders to take adequate measures to prevent this practice. As mentioned, the Madrid Protocol makes it possible for trademark protection to be extended to several countries by filing a single application for registration in a country of origin. The extent of this protection is granted in several or all the member countries, in accordance with the option made by the applicant in the original application. In Brazil, the original application for registration would be prepared in English or French and filed with the National Industrial Property Institute (the "INPI"), which would send it on to the managing agency, the World Intellectual Property Organization (the "WIPO"), with headquarters in Geneva, Switzerland. Applying for international registration requires prior registration or application for registration of the same trademark in the applicant's country

of origin. This basic application or registration must have the same features and classes that the applicant will claim in the international application. For five years, the international registration will hinge directly on the basic application or registration in order to survive -i.e., if the latter is cancelled the former will also be automatically cancelled. As a solution, the international registration may be transformed into applications for domestic registration in the countries originally stated by the applicant. On receiving the international application, the WIPO will send it on to each of the official trademark agencies in the countries stated by the applicant. These agencies will have to inform WIPO within eighteen months, at most, if there is any obstacle to registration, such as prior registration in another's name or breach of a local law. If there is no action by the country's trademark agency within that term, the international trademark registration will be granted automatically in that country and the trademark registration will start to be valid retroactively to the date of the initial application in the country of origin. If there is any impediment to registration, the procedure for the international application will be governed by that country's local law, without prejudice to international registration in the other countries chosen by the applicant, provided no impediment is found there. The procedure is similar to the one adopted a few years ago for the European Community, with the so-called Community Trademark registration, by means of which a single application for registration filed at the central office, in Alicante, Spain, may have its protection extended to all the European Community countries. The advantages of the Madrid Protocol are evident, as it will enable Brazilian companies to register their trademarks in more than 50 countries by filing a single application for registration to the INPI itself. Extension of registration validity, assignment and transfer, or any change in the registration terms would also be annotated in all registrations, against payment of the specific fee. There are, however, certain drawbacks to Brazil's immediate adherence to the Madrid Protocol. As currently structured, the INPI would face serious difficulty in implementing and complying with Protocol rules. Due to the lack of funds and qualified personnel in that independent federal government agency, it takes approximately three years for a trademark registration to be approved. Thus, as currently structured, the INPI would not be in a position to meet the 18-month deadline established in the Protocol to grant a trademark registration. Since the term is compulsory -i.e. if INPI does not indicate an impediment in that period- registration will be granted automatically without any formal examination and with possible adverse effects on the trademarks of third parties, registered previously. Furthermore, assumption of this obligation would adversely affect the thousands of proceedings currently pending examination by the INPI. Lastly, the INPI, which is already coping with the lack of qualified personnel, would have to take on employees who were able to communicate with WIPO in English and French, which, considering the current situation, would be practically impossible at short or medium term.

CONCLUSION The Madrid Protocol is quite an effective instrument for expediting international trademark registration, and for considerably reducing costs by making it possible for companies to obtain registration in various countries. The dynamics of the Protocol are part of the globalization process and market economy, in which trademarks quickly appear and disappear with the same ease, with a view toward satisfying consumer desire. The speed in communications demands that these measures are included in a swift and objective process, and there is no doubt that the Protocol meets this need. Care must be taken, however, to avoid the errors that in the past led Brazil to denounce the Madrid Agreement in 1934. Before defending immediate adherence to the Protocol, the INPI will have to restructure its equipment and personnel thoroughly in order to cope with this obligation. If the INPI is not presently in a position to handle the normal trademark registration applications, accumulating thousands of proceedings, it does not take


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much effort to imagine what will happen when this number is multiplied by ten, twenty or a hundred. Without doubt, the number of proceedings coming from the more than 50 countries that have already agreed to the Protocol will be infinitely greater than those Brazil will send abroad and those now pending examination by the INPI. Before considering signing the Madrid Protocol, therefore, our own house must be put in order. To reverse this process would cause serious losses to Brazilian companies or even to the original applications for registration that take approximately three years to be approved, while international registration would only take 18 months. To aggravate this situation there would be the additional fact that as INPI does not have the basic structure to meet this deadline, the proceedings would be approved automatically, without any prior examination, which would certainly increase the flow of legal actions, overloading the Brazilian courts even more. Beyond these aspects, the political and economic interests of the countries must also be considered, as well as reciprocal rights, which must be studied and are probably why the United States has not yet decided to sign the Madrid Protocol. In fact, the only countries on the American Continent that have done so are Cuba and Antigua/Barbuda, which proves the current lack of interest of the other countries. Some claim that signing the Protocol would be contrary to the constitutional principles, national sovereignty, and laws of Brazil. Without getting into the merits of this discussion, we believe that the procedure is similar to what Brazil has already experienced when signing the PCT, when these questions were resolved. Unquestionably, the reasons that led Brazil to denounce the Madrid Agreement in 1934 no longer exist and cannot be used to assess the advisability of our signing the Madrid Protocol. Times have changed: Brazilian products improve daily up to international standards and find new markets in which full, speedy and effective trademark protection is a preponderant factor. To deny this would be nonsensical, and would imply holding back the inevitable process of bringing our legislation in line with international requirements. Nevertheless, to agree hastily would be rash in view of the absolute lack of conditions for the INPI to assume the resulting responsibilities. Unless it were on the understanding that the Madrid Protocol will only take effect in Brazil in two or three years' time, sufficient to restructure the INPI, the first step that will have to be taken is such full restructuring so that INPI may prepare itself to meet the deadlines and requirements arising from assumption of this responsibility. One need only recall that when the current Industrial Property Law (Law 9279 of 14th May 1996) was enacted, article 239 thereof already provided for the need to make the necessary changes in INPI. Nothing has been done since then, however, and what one sees is a visible increase in the difficulties INPI faces to achieve its objects. To reverse this process would be contrary to national interests, and would certainly lead to a repetition of the events when Brazil signed and later denounced the Madrid Agreement, in 1934.

CANADA RULING ABOUT ORIGINALITY

AND FAIR DEALING STANDARDS by David Gray

([email protected]) McCarthy Tétrault (Montreal)

The Supreme Court of Canada, in CCH Canadian Ltd. v. Law Society of Upper Canada (2004), S.C.C. 13, (decision 4th March 2004), has reached an important decision dealing with three continuing issues in the law of copyright: originality; fair dealing; and authorization. The case originated as an action by a number of legal publishers against the Law Society because of a photocopying service provided by the Law Society for legal materials within the collection of the Law Society library.

In addition, the publishers sought to make the Law Society liable for copying by library users who were able to make copies of library material on a coin-operated photocopier provided by the Library. Because this case was intended largely as a test case, the publishers included a representative sampling of material comprised of certain material of undeniable originality, but also of other material, such as headnotes, case summaries, and a topical index, which clearly required the Court to consider the standard of originality required for copyrighted works. In summary, the Court decided as follows:

ORIGINALITY The Court defined an "original" work as one that is the product of an author's exercise of skill and judgment. The Court further stated that the exercise of skill and judgment that is required to produce the work must not be so trivial that it could be characterized as a purely mechanical exercise. The Court both rejected the "sweat of the brow" test of originality, which had been enunciated in some prior Canadian cases, and, surprisingly, also rejected the U.S. Supreme Court Feist test. The Court said that for a work to have copyright in Canada it was only necessary for it to be the product of "skill and judgment." Creativity, even "a minimal degree of creativity," was not required. On the facts of this case, the Court concluded that all the works in question were copyrightable. The headnotes, topical indexes, and case summaries all required skill and labour in their creation. Even the index of tax cases could be copyrighted because the author had to make an initial decision as to which cases to include, quite apart from the other items in the index. Only the judicial decisions would not have had copyrights held by the publishers, since the publishers only added basic factual information about the date of the judgment and the names of counsel, and corrected minor grammatical errors and spelling mistakes. The issue of the copyrightability of the decisions themselves was moot, however, because the decisions were published as part of a compilation with headnotes that were copyrighted. Since creativity, even of a minimal degree, is not required, would the CCH Court have found that the Feist white pages were the product of skill and judgment, and therefore copyrightable? Presumably, such a work could still be characterized as a purely mechanical exercise requiring no more than a trivial amount of skill and judgment. However, would application of the CCH test change the result of the Canadian Court of Appeal decision in Teledirect? This case involved the selection and arrangement of businesses under headings as in a typical yellow pages telephone directory. In CCH, the Court found the index of tax cases to be copyrightable. The application of the CCH test to databases and compilations of data will undoubtedly continue to be the subject of debate among legal scholars.

FAIR DEALING The Court also had to consider whether copying individual cases and articles at the request of library users infringed copyright. Here, the Court adopted a theory widely advanced by Professor David Vaver that fair dealing was a "user right" and not simply a defense. The Court accepted that such a "user right" must not be interpreted restrictively. It was necessary to show that the dealing was for an enumerated purpose -in this case, for either research or private study- and that it was fair. The Court agreed with the court below that the research could be for commercial purposes. The Court examined fairness applying the standards adopted by the court below, factors very similar to those set out in section 107 of the U.S. Copyright Act. Those factors as enumerated by the Court are as follows: • the purpose of the dealing; • the character of the dealing; • the amount of the dealing; • alternatives to the dealing;


12

• the nature of the work; • effect of the dealing on the work.

Perhaps most importantly, the Court was satisfied that persons or institutions relying on the s.29 fair dealing exception need only prove in respect of their own dealings that they followed a practice or policy that was intended to restrict copying to research-based and "fair" copying. The Court found that the Law Society did have such a policy or process in place, and therefore that it did not have to show that each individual user's copying qualified for the exception. The Law Society ordinarily restricted copying to single copies for specific purposes related to research or private study. Any copying in excess of 5% of a secondary source had to be approved by the Reference Librarian and the service was provided on a not for profit basis. On these facts, the Court found that the dealing was for research and that it was "fair". In the absence of evidence to the contrary, the Law Society could rely on its system or process to prove that the exception applied.

AUTHORIZATION The Law Society's provision of a coin-operated photocopying machine in the library was held to not be an authorization of infringement. While perhaps obiter (because it seems clear that the Law Society could not be liable for authorizing infringement if no infringement occurred), nevertheless, the Canadian Supreme Court refused to follow the Australian decision in Moorhouse and adopted the more traditional and strict U.K. and Canadian approach to authorization. A person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright. Courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law. The posting of a notice over the photocopier does not constitute an acknowledgement that the photocopier will be used in an illegal manner. In any event, the Law Society lacks sufficient control over its patrons to permit the conclusion that it sanctioned, approved or countenanced any infringement. On a cross-appeal by the publishers, the Court agreed that a single facsimile transmission to a single recipient was not a communication to the public by telecommunication so as to be an infringement under s.3(1)(f). Conclusion In conclusion, in subtle and perhaps previously unconceived ways, the Canadian Supreme Court has expanded the range of copyrighted works such that "skill and judgment," but not creativity, are involved in the creation. The Court has also expanded user rights, again in subtle and as yet unresolved ways. Firstly, such user rights must not be restrictively interpreted. Secondly, an institution can rely on a process or system designed to ensure that its copying is "fair dealing", without having to prove that the copying of each individual user is fair, at least in the absence of evidence to the contrary.

BOOK INTERNET ET E-COMMERCE

EN DROIT LUXEMBOURGEOIS Bankers, insurers, IT and communications companies, manufacturers, merchants, professionals, consultants, all the actors of the economic world are affected by the development of the Internet and of the e-commerce. Provided that the applicable rules are understood, they may take advantage of the opportunities offered by these powerful communications tools. This book, written in French, aims at giving readily available and practical answers to the main issues raised by the use of the Internet, from a Luxembourg law point of view.

It first considers the legal issues relating to the creation and hosting of a web site. Once this site is being operated, electronic contracts may be concluded. Thus, the rules regarding the conclusion of the contract, e-signatures, evidence and consumers protection are dealt with. On-line financial transactions, the creation of an e-banking site, specific provisions regarding VAT issues, data processing, and cyber-crime are also considered. Finally, as the Internet generates a new type of litigation, the available dispute resolution mechanisms are discussed. This book is comprised of six chapters: • web site

· web site creation agreement · copyright and internet

• operation of a website · domain name and referencing · marketing techniques · website operation

• electronic agreement · conclusion of an agreement via the Internet · evidence of the agreement and its content

• electronic agreement and consumer protection · elements of protection provided by law · flaws in the protection implemented

• electronic signature · definition and purpose · effects

• online financial transactions · creation of an e-banking website · online financial transactions

• data processing · provisions of the law of 2 august 2002 · specific categories of data

• computer hacking · computer fraud · evidence · international aspects

• VAT · distance selling of goods · provision of online services

• disputes resolution · liability of the different actors · elements of international private law

To order your copy, feel free to print out and send the form contained in this two-sided leaflet:

http://www.thelink.lu/leaflet.pdf

EVENT SWITZERLAND

YOUNG LAWYERS DRAFTING COMPETITION Organized by the IBA Communications Law Committee on the occasion of the Conference of the Antitrust and Trade Law Committee and


13

Communications Law Committee, to be held in Rome on 17th-18th May 2004.

INTRODUCTION The Communications Law Committee of the International Bar Association (the "IBA") is running a special project for young lawyers, the Second Annual Communications Law Committee Young Lawyers Drafting Competition. This competition invites lawyers up to and including the age of 35 to submit a paper on the following topic: "Issues on Broadband: Transactional, Regulatory, and Intellectual Property." The paper should cover the growing importance of worldwide broadband services and the legal issues attached to the same, specifically the transactional, regulatory, and intellectual property issues. Broadband is among the most crucial "meeting points" of sometimes converging, sometimes diverging, economic, technical, commercial, political, and legal interests. From a transactional point of view, an analysis is necessary of how deals are or should be structured to permit companies to participate successfully in the business. Some markets have found difficulties in regulating the growing trend, and consequently they must apply competition law remedies and/or reinvent specific regulation. Furthermore, the traditional concerns lying in the natural junction between broadband communications and content delivery have increased in recent years, particularly due to technical developments and homogeneity in the international media sector. Other considerations should include aspects of intellectual property law, linked with the new use of intangible assets that have been, and will be, made possible by broadband communication means.

RULES FOR PARTICIPATION 1. The Young Lawyers Drafting Competition is free to enter. It is open to lawyers up to and including the age of 35 (i.e., lawyers born in or after 1969), whether or not they are members of the IBA. Papers shall be based on the following topic: "Issues on Broadband: Transactional, Regulatory, and Intellectual Property." Papers must be original, unpublished works. They shall not be under consideration for any commercial contract by any publishing house. The author is warranting his/her unrestricted copyright to the paper submitted. 2. Participation with a penname will be permitted, provided that an operative contact and a valid address are provided for a term until 30th June 2004. If authors using pennames are chosen as finalists, they will be required to prove their identity, age, and qualification as a lawyer. If these requirements are not met, the candidature will automatically fail. At the request of the Judging Committee, submissions with pennames will, in any case, need to be disclosed by all participants once a winner has been chosen. Pennames are mandated for lawyers who work in the law firms of members of the Judging Committee, i.e., Olswang, Jones Day, and Kraatz & Kraatz. 3. In the case of papers submitted under a penname, the email address or any other reference of the sender shall not disclose the participant's true details. For example, in the case of email addresses, anonymous addresses can be obtained by using free email services. 4. Joint submissions are permitted. In this case, the prize must be split among the joint participants in the way they consider appropriate. In any event, both participants must meet the requirements set forth in these Rules. 5. Papers shall be sent by email, preferably as MS Word documents or as .pdf files, to the following four recipients: (a) Mr. Bernard Amory, Jones Day, Brussels, at [email protected]; (b) Mr. Klaus J. Kraatz, Kraatz & Kraatz, Kronberg, at [email protected]; (c) Mr. Colin Long, Olswang, London, at [email protected]; and (d) Mr. Michael Bernasconi, Baer & Karrer, Zurich, at [email protected]. 6. Papers shall be written in English and shall be between 7,000 and 14,000 words in length. The text shall be double-spaced. Each paper shall

contain the author's name, or penname, and a valid contact address on the front page. 7. Papers must be submitted and received by Wednesday, 31st March 2004. Papers received after this time will not be considered. 8. The Judging Committee will consist of three former Chairs of the IBA Communications Law Committee, Mssrs. Bernard Amory, Klaus Juergen Kraatz, and Colin Long. They will judge the papers on the basis of legal argumentation, research, style, logic, originality, and overall quality of the content. An international approach, rather than a strict domestic approach, will be appreciated. 9. The Judging Committee plans to communicate its decision to the winner and any additional finalists between 26th April and 2nd May 2004, along with a request for their identification as per rule 4 and 5. 10. The winner will be announced to the public at the IBA Conference to be held in Rome on 17th-18th May 2004. The decision of the Judging Committee is final and no correspondence will be entered into. The decision may be published on the IBA website or on IBA publications, or communicated to IBA members by any other means. Winners will be contacted at the address indicated by them on the paper. They will be requested to provide a biographical note giving details of their legal career, studies, and professional appointments. 11. The prize for the winning paper is as follows: (i) Free registration for the Telecommunications and Competition Law Conference of the IBA Committees C and Cm to be held on 17th-18th May 2004, in Rome, Italy, including the lunch and dinner of 17th May; (ii) $800 to cover travel expenses and hotel fees, or part thereof (this sum will be paid once the winner gives sufficient detail to the IBA and to Michael Bernasconi on how it will be allocated); and (iii) the chance to present the paper during the Conference. 12. Committee Cm has the right to publish a selection of the papers submitted, including but not limited to the winning paper (either the full text or extracts thereof) up to 12 months after the competition has ended. This includes but is not limited to the publication in the Conference documentation and/or on the IBA web site and/or in the Communications Law Committee Newsletter and/or other IBA publications.


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In any event, the name of the author will be indicated appropriately. Authors shall include a biographical note giving details of their legal career, studies, and professional appointments. Papers received that are not in this form may not be considered. 13. Each participant may only present one paper. Employees of the IBA or Officers of any IBA Committee are excluded from the competition. 14. The IBA, the Communications Law Committee, the Judging Committee, and the organizers of the competition are not responsible for the loss, damage, or non-arrival of any paper, nor for any costs or expenses incurred in the preparation or the submission of any paper. 15. Participants shall be expected to have read and accepted all the above Rules. For more information please contact: [email protected]


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EDITOR / EDITORIAL BOARD

EDITOR IN CHIEF: Stephan LE GOUEFF, , Luxembourg MANAGING EDITOR: Neil I. JACOBS, NI Jacobs & Associates, New York

Country Firm Contact E-mail Site Argentina Estudio Millé Gonzalo ZORRILLA [email protected] www.reis.com.ar/estudiomille

Australia Clayton Utz Julian GYNELL [email protected] www.claytonutz.com

Austria Dorda, Brugger & Jordis Stephan POLSTER [email protected] www.dbj.at

Belgium Altius Herman DE BAUW [email protected]

Brazil Pinheiro Neto - Advogados Raphael de CUNTO [email protected] www.pinheironeto.com.br

Canada McCarthy Tétrault Michel RACICOT (Montreal) Charles MORGAN (Toronto)

[email protected] [email protected]

www.mccarthy.ca

Chile Carey y Cía. Ltda. Alfonso SILVA [email protected] www.carey.cl

China Lehman, Lee Xu Blaine TURNACLIFF [email protected] www.lehmanlaw.com

Colombia Cavelier Abogados Daniel PEÑA [email protected] www.cavelier-abogados.com

Egypt Kamel Law Office Mohamed KAMEL [email protected] www.ie-eg.com/kamellaw

Finland Roschier Holmberg Attorneys Ltd Craig THOMPSON [email protected] www.roschier.com

France Kahn & Associés Sabine LIPOVETSKY [email protected] www.kahnlaw.com

Germany Wessing Jürgen A. HEILBOCK [email protected] www.taylorwessing.com

Hong Kong Johnson Stokes & Master David ELLIS [email protected] www.jsm.com.hk

India Nishith Desai Associates Vaibhav PARIKH [email protected] www.nishithdesai.com

Ireland McCann Fitzgerald Damian COLLINS [email protected] www.mccann-fitzgerald.ie

Israel Soroker-Agmon, Advocates&Patent Attorneys Jonathan AGMON [email protected] www.ip-law.co.il

Italy LexJus Fabrizio CUGIA [email protected]

Lebanon Alem & Associates Leila LAILA [email protected] www.alemlaw.com

Luxembourg [email protected] Stéphan LE GOUEFF [email protected] www.vocats.com

Malaysia Zaid Ibrahim & Co. Julian DING [email protected]

Mexico Barrera, Siqueiros y Torres Landa, S.C. Andrés ACEDO [email protected] www.bstl.com.mx

Netherlands Kennedy Van der Laan Martine DE KONING [email protected] www.kvdl.nl

New Zealand Bell Gully David G. BOSWELL [email protected] www.bellgully.com

Norway Thommessen Krefting Greve Lund Arne RINGNES [email protected] www.tkgl.no

Portugal Vieira De Almeida & Associados Margarida COUTO [email protected]

South Africa Webber Wentzel Bowens Peter GREALY [email protected] www.wwb.co.za

Spain Gomez Acebo & Pombo Almudena ARPON de MENDIVIL [email protected] www.gomezacebo-pombo.com

Sweden Advokatfirman Lindahl Erik BERGENSTRÄHLE [email protected] www.lindahl.se

Switzerland Bär & Karrer Michele BERNASCONI [email protected] www.baerkarrer.ch

Turkey Hergüner, Bilgen & Özeke Kayra UCER [email protected]

UAE Afridi & Angell Antony WATSON [email protected] www.afridi.com

UK Olswang Colin LONG [email protected] www.olswang.co.uk


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TABLE OF CONTENTS BY COUNTRY

NEWS ITEMS

Country Title CATEGORY

ARGENTINA Granting Licenses to Certifying Entities DIGITAL SIGNATURES

The Spam Act 2003 (Cth) ELECTRONIC COMMERCE

ACIP Report on Business Process Patents INTELLECTUAL PROPERTY AUSTRALIA

Privacy Bill 2003 PRIVACY

CHILE New Tariff Decree for CTC in Local Telephone Service TARIFFS

CHINA New Security Standard Implemented TELECOMMUNICATIONS

FINLAND Supreme Court Decision on Market Court Jurisdiction INTELLECTUAL PROPERTY

Former Prime Minister Opposes Internet Domain DOMAIN NAMES

Typographical Errors in Internet Auctions ELECTRONIC COMMERCE

Ban on Spy Cameras and Voyeurism PRIVACY GERMANY

Illegal Telephone Charges for Hidden Dialers TARIFFS

Database Creation of Job-Hoppers in BPO Companies ELECTRONIC COMMERCE INDIA

Reforms in Call Center Operations TELECOMMUNICATIONS

LEBANON Preparing Basket of E-Commerce Laws ELECTRONIC COMMERCE

International Interconnection Agreements COMPETITION MEXICO

WTO Resolution on the Telecom Dispute with the US TELECOMMUNICATIONS

PORTUGAL Electronic Communications Law in Force CONVERGENCE

SOUTH AFRICA Introduction of Draft Convergence Bill CONVERGENCE

SWITZERLAND Enforcement of an English Freezing Injunction GENERAL DEVELOPMENTS

TURKEY Taking Liberties in Telecoms Market TELECOMMUNICATIONS

UK Government Awards Broadband Framework Agreements MARKET ACCESS

COMMENTARIES

BRAZIL The Madrid Protocol on International Trademarks INTELLECTUAL PROPERTY

CANADA Ruling About Originality and Fair Dealing Standards INTELLECTUAL PROPERTY

FRANCE The Relaxing of of “.fr” Naming Policy DOMAIN NAMES


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BOOK

LUXEMBOURG Internet et e-Commerce en Droit Luxembourgeois

EVENT

SWITZERLAND Young Lawyers Drafting Competition

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