Luxembourg supports laws and conventions protecting intellectual property rights to an extent comparable with that of its surrounding European neighbors (France, Belgium and Germany) and the United States.  Luxembourg’s outgoing government drafted legislation to implement the October 1998 European Union Directive on Privacy Protection, which prohibits transmitting personal name-linked data across borders without adequate privacy protections, and the new government is likely to pursue this due to its importance to Luxembourg’s financial services industry.  Encryption technology is not restricted in Luxembourg except that export of cryptographic items is controlled in accordance with the Wassenaar Arrangement and the EU Dual-Use Regulation.
 

13.1    Protection for Intellectual Property

Luxembourg is supportive of laws governing intellectual property rights as demonstrated by their membership in the World Intellectual Property Organization, which they joined in March of 1985.  Subject matter protection for software is provided by national law as well as by supranational law (such as the European Patent Convention).  The chart belows shows Luxembourg's convention memberships as well as those of the U.S. and several other Western European countries for comparison purposes.
 
 

Country	Copyright	Patent	Berne Convention	Universal Copyright Convention	Paris Convention	European Patent Convention	Patent Cooperation Treaty
Luxembourg	Yes	Yes	Yes	Yes	Yes	Yes	Yes
United States	Yes	Yes	Yes	Yes	Yes	No	Yes
France	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Belgium	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Germany	Yes	Yes	Yes	Yes	Yes	Yes	Yes

Source:  International Software 99 Report, www.fenwick.com
 

            Software Copyrights

            Even with appropriate laws and enforcement, software piracy does exist in Luxembourg and retail revenue losses from the use of pirated software in 1998 were estimated at (US$) 53.4M.  Luxembourg's software piracy rate of 35% is comparable to that of other Western European countries and, similarly, has declined over the past five years.
 
 

Luxembourg	1994	1995	1996	1997	1998
Piracy Rate	53%	48%	38%	36%	35%
Retail Revenue Loss (US$ in Millions)	$76.0	$78.2	$49.2	$51.5	$53.4

    Trans-border Data Flows

 Luxembourg is a party to the European Union Directive on Privacy Protection which took effect on October 25, 1998.  This directive prohibits companies operating in any of the 15 EU nations from moving personal name-linked data out of the country unless adequate privacy protections are in place.  (Source:  Forrester Research Report).  As of October 23, 1998, Luxembourg along with Germany and France had not yet begun to consider laws necessary to implement the directive.  (Sources:  European Commission Press Release, October 23, 1998 and "As The Cyber-World Turns, Internet Legal Practice Newsletter, December 1997).  However, in the 3rd quarter of 1999, the outgoing Luxembourg government published a draft law regarding the regulation of trade via the internet and is continuing to work with appropriate legal and business representatives to refine the draft.  The bill attempts to address issues such as the security of e-commerce and the legal status of electronic contracts.  It is likely that the new government will pursue this matter because of its importance to Luxembourg's strong financial services industry. (Source:  The Economist Intelligence Unit Limited 1999, EIU Country Report 3rd quarter 1999).

13.2    Privacy and Censorship

A report published by the Electronic Privacy Information Center which provides an international survey of encryption policies indicates that "governmental regulation of cryptographic security techniques endangers personal privacy.  Encryption ensures the confidentiality of personal records, such as medical information, personal financial data, and electronic mail.  In a networked environment, such information is increasingly at risk of being stolen or misused."  There are no domestic controls or import restrictions on cryptography in Luxembourg.  Luxembourg does control the export of cryptographic items in accordance with the Wassenaar Arrangement of which it is a participant, and the EU Dual-Use Regulation.  The chart below shows Luxembourg's rating along with those of the U.S. and several other Western European countries.
 
 

Country	1999 Rating	1998 Rating
Luxembourg	Green/Yellow	Green/Yellow
United States	Yellow	Yellow/Red
Germany	Green	Green
France	Yellow/Green	Red/Yellow
Belgium	Green/Yellow	Green

Legend

Green    -       Signifies that the country promotes or has expressed support for a policy that allows for unhindered legal  use of cryptography, such as adopting the OECD Guidelines.

Yellow    -    Signifies that the country has proposed new domesticd cryptography controls, including domestic use controls, has import controls, or has shown a willingness to abide strictly by the terms of the Wassenaar Arrangement.

Red    -        Signifies that the country has instituted sweeping controls on cryptography, including domestic use controls.

Source:  Cryptography and Liberty 1999, An International Survey of Encrption Policy, Electronic Privacy Center, Washington, DC (www.epic.org)

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