An agreed statement was adopted concerning Article 10 of the WCT on limitations and exceptions, which reads as follows: "It is understood that the provisions of Article 10 permit Contracting Parties to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws which have been considered acceptable under the Berne Convention. Similarly, these provisions should be understood to permit Contracting Parties to devise new exceptions and limitations that are appropriate in the digital network environment. It is also understood that Article 10(2) neither reduces nor extends the scope of applicability of the limitations and exceptions permitted by the Berne Convention." An agreed statement concerning Article 16 of the WPPT on limitations and exceptions foresees the mutatis mutandis application of the above-quoted agreed statement.

This agreed statement requires appropriate interpretation. Both Article 10 of the WCT and Article 16(1) of the WPPT prescribe the application of the same three-step test as a condition for the introduction of any limitation on or exception to the rights granted by the treaties as what is provided in Article 9(2) of the Berne Convention concerning the right of reproduction and in Article 13 of the TRIPs Agreement concerning any aspect of copyright. Thus, any limitation or exception may only be introduced (i) in a special case; (ii) if it does not conflict with a normal exploitation of works, performances or phonograms, respectively; and (iii) if it does not unreasonably prejudice the legitimate interests of the owners of rights.

The application of the three-step test to the rights of performers and producers of phonograms is of particular importance, since it means that the out-of-date provisions

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of Article 15(1) of the Rome Convention which, for example, grant full discretion to the Contracting Parties to treat any personal use as not infringing the rights of performers and producers of phonograms - have been rejected.

Article 10(2) of the WCT, similarly to Article 13 of the TRIPs Agreement, extends the application of the three-step test to all economic rights provided in the Berne Convention, while Article 16(1) of the WPPT provides that Contracting States may introduce "the same kinds of limitations and exceptions with regard to the protection of performers and producers of phonograms as they provide for, in their national legislation, in connection with the protection of copyright in literary and artistic works."

The WIPO study on the "Implications of the TRIPs Agreement on Treaties Administered by WIPO" refers to the fact that "[t]he Berne Convention contains a similar provision concerning the exclusive right of reproduction (Article 9(2)) and a number of exceptions or limitations to the same and other exclusive rights (see Articles 10, 10bis and l4bis(3)) and, it permits the replacement of the exclusive right of broadcasting, and the exclusive right of recording of musical works, by non-voluntary licenses (see Articles 11bis(2) and 13(1))." After this, it states the following: "None of the limitations and exceptions permitted by the Berne Convention should, if correctly applied, conflict with the normal exploitation of the work and none of them should, if correctly applied, prejudice unreasonably the legitimate interests of the right holder. Thus, generally and normally, there is no conflict between the Berne Convention and the TRIPs Agreement as far as exceptions and limitations to the exclusive rights are concerned."{44}

As indicated in this analysis, the application of the three-step test for the specific limitations and exceptions allowed by the Berne Convention is an interpretation tool - it guarantees the appropriate interpretation and application of those limitations and exceptions - while, as far as the right of reproduction is concerned, it determines which other limitations or exceptions may be applied.

On the basis of this analysis, it is clear that what the above-quoted agreed statement refers to - namely the carrying forward and appropriate extension into the digital environment of limitations and exceptions "which have been considered acceptable under the Berne Convention" - should not be considered an automatic and mechanical exercise; it is all subject to the application of the three-step test. The conditions of normal exploitation of works, performances and phonograms are different in a digital environment from the conditions in a traditional, analog environment, and the scope of where unreasonable prejudice may be caused to the legitimate interests of owners of rights may also differ. Thus, the applicability and the extent of the "existing" limitations and exceptions should be reviewed when they are "carried forward" to the digital environment. The result of such a review may be that the scope of application of the limitations and exceptions should be narrowed (or, perhaps just the opposite, broadened, as the agreed statement also underlines it).

{44} WIPO publication, No. 464(E), at 22-23.

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E. TECHNOLOGICAL MEASURES OF PROTECTION AND RIGHTS MANAGEMENT

INFORMATION

It was recognized during the preparatory work that it is not sufficient to provide for appropriate rights in respect to digital uses of works, particularly uses on the Internet. In such an environment, no rights may be applied efficiently without the support of technological measures of protection and of rights management information necessary to license and monitor uses. There was agreement that the application of such measures and information should be left to the interested rights owners, but there was also agreement that appropriate legal protection is needed for the use of such measures and information.

Articles 11 and 12 of the WCT oblige Contracting Parties to grant such legal protection.

Under Article 11, Contracting Parties must provide "adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect to their works, which are not authorized by the authors concerned or permitted by law."

Article 12(1) obliges Contracting Parties to "provide adequate and effective legal remedies against any person knowingly performing any of the following acts knowing, or with respect to civil remedies having reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement of any right covered by this Treaty or the Berne Convention: (i) to remove or alter any electronic rights management information without authority; (ii) to distribute, import for distribution, broadcast or communicate to the public, without authority, works or copies of works knowing that electronic rights management information has been removed or altered without authority." Article 12(2) defines "rights management information" as meaning "information which identifies the work, the author of the work, the owner of any right in the work, or information about the terms and conditions of use of the work, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public."

An agreed statement was adopted by the Diplomatic Conference concerning Article 12 which consists of two parts. The first part reads as follows: "It is understood that the reference to 'infringement of any right covered by this Treaty or the Berne Convention' includes both exclusive rights and rights of remuneration." The second part reads as follows: "It is further understood that Contracting Parties will not rely on this Article to devise or implement rights management systems that would have the effect of imposing formalities which are not permitted under the Berne Convention or this Treaty, prohibiting the free movement of goods or impeding the enjoyment of rights under this Treaty."

Articles 18 and 19 of the WPPT contain practically the same provisions as Articles 11 and 12 of the WCT, and an agreed statement concerning Article 19 of the WPPT foresees the mutatis mutandis application of the above-quoted agreed statement also for that Article.

These provisions are of a sufficiently general nature, but contain the necessary elements on the basis of which appropriate provisions may be adopted at the national level. It follows from the general nature of these provisions that national legislators may

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have to go further and in greater detail in order to offer efficient protection for technological measures and rights management information where technological developments so require and where such protection, taking into account all the legitimate interests, is justified.

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