INTRODUCTION

On 27 July 2000, the Dispute Settlement Body (the “DSB”) adopted the Panel Report in United States – Section 110(5) of the US Copyright Act (“United States – Section 110(5)”). On 24 August 2000, the United States informed the DSB, pursuant to Article 21.3 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), that it would implement the recommendations and rulings of the DSB in this dispute. At the DSB meeting of 11 September 2000, the United States said that it would require a “reasonable period of time” to do so, under the terms of Article 21.3 of the DSU.

In view of the impossibility to reach an agreement with the United States on the period of time required for the implementation of those recommendations and rulings, the European Communities and their member States (hereinafter referred to as the “European Communities”) requested that such period be determined by binding arbitration pursuant to Article 21.3(c) of the DSU.

By joint letter of 22 November 2000, the European Communities and the United States notified the DSB that they had agreed that the duration of the “reasonable period of time” for implementation should be determined through binding arbitration, under the terms of Article 21.3(c) of the DSU, and that I should act as Arbitrator. The parties also indicated in that letter that they had agreed to extend the time-period for the arbitration, fixed at 90 days from the date of adoption by the DSB by Article 21.3(c) of the DSU, until 26 January 2001. Notwithstanding this extension of the time-period, the parties stated that the arbitration award would be deemed to be an award made under Article 21.3(c) of the DSU. My acceptance of this designation as Arbitrator was conveyed to the parties by letter of 23 November 2000.

Written submissions were received from the European Communities and the United States on 1 December 2000, and an oral hearing was held on 7 December 2000.

ARGUMENTS OF THE PARTIES

European Communities

In the view of the European Communities, implementation in this dispute requires a “repeal” of Section 110(5)(B) of the Copyright Act, as well as a “modest adaptation” to Section 110(5)(A) of that Act.