Notes on Article 7
99. Article 7 makes it clear that, despite the obligation established by Article 3 for Contracting Parties to secure intellectual property protection in respect of layout-designs that are original in a sense elaborated in Article 3(2), Contracting Parties are nevertheless free to withhold such protection until either of two conditions have been satisfied, namely, commercial exploitation (item (i)) or application for registration of a layout-design or registration of such a layout-design (item (ii)). These conditions are optional, so that a Contracting Party that did not invoke them would be required, in consequence of Article 3, to protect original layout-designs from their creation.
100. Item (i) permits Contracting Parties to withhold protection from a layout-design until the layout-design has been commercially exploited somewhere in the world. The purpose of this provision is to recognize and to sanction the approach adopted in some existing legislative instruments whereby protection is considered to be necessary, and is only extended, once commercial exploitation of the layout-design has occurred. Once such commercial exploitation has taken place, the layout-design is both available for the benefit of the consuming public and apparent to competitors, so that the creator may be considered to have both the right to and the need for protection.
101. The commercial exploitation of a layout-design may be understood as meaning any distribution of copies of the layout-design or microchips incorporating the layout-design, whether independently or as part of some other article, for commercial, as opposed to private, purposes.
102. The proposal, favored by some delegations during the fourth session of the Committee of Experts, that "commercial" exploitation should be replaced by "industrial" exploitation has not been adopted. The adoption of that proposal would penalize, by withholding protection from, those enterprises that specialize in design, as opposed to manufacture, or that perform design services on contract for a manufacturing enterprise. The exclusion of such enterprises from protection would seem to be contrary to the aim of the draft Treaty in providing an incentive to creation, as well as the aim of rewarding creators for the contribution made by their creative activity.
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