Dima Al-Azem's TED Research Web Page on: Irish Music

On the 26th of January 1999, The European Communities (EC) and their Member States (MS) have requested the opening of a formal dispute settelment in the World Trade Organization (WTO) relating to the American Copyright System. The EC is disputing section 110 (5) of the 1976 US Copyright Act that exempts resturants, bars, or other places that play music for the public from payment of royalty fees to the original artists for the music played. This "home style" exemption or policy was recently expanded under the "Fairness In Music Liscensing Act" of 1998. The Irish Music Rights Organization noticed the problematic change in U.S law (The Fairness In Music Liscensing Act of 1998) and complained to the EC claiming that European Music Artists were losing their copyrights by being denied royalty fees when their music was played in American bars and resturants. The EC alleged that section 110(5) of the US Copyright Act violates Article 9 (1) of the TRIPS Agreement, which incorporates the substantial provisions of the Berne Convention for the protection of Literary and Artistic Works (1971). Further, the EC maintains that section 110(5) is incompatible with some specific articles of the Berne Convention, which gives authors of literary and artistic works including musical works, particular exclusive rights. The United States in reply did not forward any proposals for any solutions maintaining that section 110(5) of its Copyright Act does not involve any infringement of copyright. The WTO has ruled that the fairness in Music Lisencening Act of 1998 violates the TRIPS Agreement. The US did not appeal the WTO decision accepting it as of July 2000 and proposed adherence to the law. If the U.S fails to comply to the ruling and repeal its copyright acts, the EC might impose trade sanctions or might require fines of $48 million.( Conniff, "Royality Issue Avails House," The Hollywood Reporter.)

The issue at hand was raised by the European Communities and their member states challenging the United States as being a violator of the Global Trade Rules on Musical Rights.
Australia, Brazil, Canada, Japan, and Switzerland held their rights to participate in the panel proceedings as third parties.

On a different note, Section 110(5) of the US Copyright Act of 1976, also referred to as the “homestyle exemption” was further amended and expanded by the Fairness in Music Licensing Act, which was signed by President Clinton on 27 October 1998 and entered into force on 26 January 1999.
The European Commission’s decision to open a formal dispute settlement with the United States in the World Trade Organization (WTO) was a result of a procedure opened in June 1997 under the Community regulation on trade obstacles at the requisition of the Irish Music Rights Organization and with total and complete succor of the Groupement Europeen des Societes d’ Auteurs et Compositeurs (GESAC).
This dispute is still a pending one and has not been settled yet.

Under The Fairness In Music Lisenceing Act law, retail shops, bars, and resturants of 3500 square feet or less are eligible for the "homestyle exemption", which, according to the EC's calculations, represents 70% of bars and 87% of retail shops. The European Comission services have calculated that this "exemption" law of the copyright act will lead to losses of USD 3.8 to 6.8 million a year in direct earnings for community right holders, i.e 13-24 % of the U.S performing rights organiztions annual distributions to community collecting societies.(www.eblida.org)

5. Discourse and Status: Disagreement and in progress. A pending case at the WTO
6. Forum and Scope: WTO and Multilateral
7. Decision Breadth: 11 countries
8. Legal Standing: Treaty

9. Geographic Locations:

a) Geographic Domain: European Communities and United States of America

b) Geographic Site: Western Europe

c) Geographic Impact: Ireland

10. Sub-National Factors: No

13. Direct vs. Indirect Impacts: Indirect

14. Relation of Trade Measure to Resource Impact:

a) Directly Related to Product: Yes, Music

b) Indirectly Related to Product: No

c) Not Related to Product: No

d) Related to Process: Yes, Intellectual property.

15. Trade Product Identification: Music.

17. Impact of Trade Restriction: High

19. Exporters and Importers:According to the London-based International Federation of the Phonographic Industry (IFPI), the global music market’s value was worth $38.5 billion, with the total unit sales of $3.8 billion in 1999. According to those statistics, there was a noticeable continued growth of 3% in the CD market, with 10% decline in cassette sales and an 11% decline in singles sales. In 1997, on the other hand and according to the Global 200 Report (http://www.musictrades.com/global.html), the sales volume was worth $13.8 billion. Along with our twentieth century’s advancements in technology, the Recording Industry Association of America (RIAA) (http://www.riaa.com), which represents U.S. record labels, released its annual demographic survey showing 3,051 music purchasers in the United States for the year 1999, indicating 1.1% of music buyers made their purchases via the Internet. While online purchases are still relatively low, this percentage has tripled from 1998 to 1999 (0.3% to 1.1%).

According to the RIAA (http://www.riaa.com/MD-World.cfm), in 1999 the following are the top ten importers and exporters in the global music market along with each country’s share of world sales:

In January 1999, two college freshmen created a file-sharing program to give their friends better access to recorded music by allowing them to download MP3 files, "an audio compression technology that has rapidly spread downloadable music, much of it pirated, over the Internet." (http://www.pcworld.com/news/article.asp), from the World Wide Web. This program is called Napster. In January, 2000, the RIAA sued MP3.com for music copyright violation, arguing that MP3.com needed to obtain permission before they encoded and made CDs available for free download. Some musicians and artists are protesting the policies carried by MP3.com by removing their music from the sites, while others are including recorded protests on their MP3.com web pages. The case is determined by both parties to be settled, with the judge ordering MP3.com to pay back enormous fees for each copyright violation, costing up to $10 billion.

Napster, like MP3, came under the fire of the music industry and created tensions among artists. For Example, heavy metal band Metallica has filed a law suit against Napster, claiming they are being ripped off from their services and policies and asking them to remove their songs from their site. Metallica, like many other bands and artists, believe that they have the right to protect their rights as musicians fearing the fast growing technology which is overwhelming many laws that protect musicians rights. The legal system is lagging behind technology when it comes to digital music distribution. Artists’ incomes are lost whenever their recordings are given for free via a service like Napster and MP3.com.

Under law suits pressure, "Napster Inc. closed down more than 300,000 of its online music sharing accounts to appease heavy-metal band Metallica after the rockers sued to halt the trading of their songs over the Internet." (http://www.foxmarketwire.com)

Napster is also being sued by RIAA, on behalf of America’s record industries, which protects artists from loosing millions of dollars of possible revenues.

Global Internet music piracy could be a technological advancment that strenghthens the U.S stand in this case against the EU's. The EC claimed that the US copyright Act is denying artists their rights to protect their works, therefor denying them their royalty fees. Well, what file sharing programs like MP3 and Napster are doing to artists is graver when compared to the case at hand. Artists and the record industry are losing millions of dollars a year to Internet pirates. The recording industry's lawsuit against Napster contends that it is contributing to massive number of copyright violations on the part of the services members.

Depending these claims and cases will land, a clearer connection can be drawn between them and the bilateral case between the U.S and the EC. If Napster Inc. and MP3 close down their websites letting the recording industries and the complaining artists win the disputes, the U.S position will be weakend aginst the EC's, since protecting music rights was the more important cause that prevailed. If, on the other hand, technology reigns over the conventional copyright laws for music, then the US stance to defend its Fairness in Music Lisncencing Act would be fortified.

Music represents a significant portion of its culture. Our modern world has created laws and regulations to satisfy musicians and recording companies by providing them with copyright laws that protect their contributions and their works. Those people’s talents are being protected by these copyright laws, thus their contributions to culture are being protected. Any infringement upon those rights could partly mean an infringement of a culture. In this case of the Irish music, we see a particular culture, the Irish culture, and a general one, the European Community Culture, complaining about copyright violations carried by the US against their artists, who are a part of a European culture. Now, because intellectual property laws are complex, countries do not always fully understand other countries legistlation. What the EC is trying to do in this case is to protect its European cultur, artists, and performance against the American imperialism that tries to elliminate any cultural relativty.

Copyright, in our modern era, could be considered a human right, because it protects its owners from any violations for their contributions.

2 March, 1999	The first time the US and the EC had consultations; however they failed to reach any satisfactory solutions.
15 April, 1999	The EC requested that a panel must be established in accordance with article 6 of the DSU and article 64.1 of the TRIPS agreement.
26 May, 1999	The panel was founded
6 August, 1999	The composition of the Panel was determined in response to the EC request.
November, 1999	the Panel met with the two disputing parties as well as the third parties.
15 November, 1999	the Panel sent a letter to the International Bureau of the World Intellectual Property Organization (WIPO), which is the responsible body for the administration of the Berne Convention for the Protection of Literary and Artistic Works, requesting some factual information on the terms of the Paris Act of 1971 of that Berne Convention.
22 December, 1999	The International Bureau of WIPO replied providing the needed information
12 January, 2000	Letters from the Disputing parties commenting on this information were also sent
14 April, 2000	the Panel presented its Interim Report to the parties to the dispute
5 May, 2000	The Panel submitted its final report to the parties.
June 2000	The WTO Found that the Fairness In Music Licnesing Act violates the TRIPS agreement.

United States	37%
Japan	16.7%
United Kingdom	7.6%
Germany	7.4%
France	5.2%
Canada	2.3%
Brazil	1.7%
Australia	1.7%
Spain	1.7%
Mexico	1.6%