This study aims to examine the importance of intellectual property rights(IPR) protection in digital content trade, particularly focusing on the economic impacts of the international diffusion of IPR protection. Additionally, it seeks to identify the appropriate roles and responsibilities that can be assigned to platforms, which play a significant role in the international distribution of digital content, in order to protect IPR in digital content trade. The study also explores the necessity of international cooperation to facilitate these efforts. In Chapter 2, we examine the trends in Korea’s digital content market and trade to understand the changing significance of digital content in the economy. The revenue of Korea’s digital content industry increased from 20.3 billion USD in 2013 to 45.8 billion USD in 2021, with an average annual growth rate of 10.7%. During the same period, revenue per business entity in the digital content industry grew by an average of 11.6% annually, and revenue per employee also increased by an average of 8.8% annually, indicating an overall improvement in business performance. Exports of Korea’s content industry rose from 9.62 billion USD in 2018 to 13.24 billion USD in 2022. The trade surplus in the content industry expanded significantly from 8.4 billion USD in 2018 to 12.09 billion USD in 2022, with substantial trade surpluses recorded in industries such as gaming, music, broadcasting, character, and content solutions.

Chapter 3 outlines the trends in discussions on IPR protection for digital content from a trade perspective. IPR protection issues for digital content have been heavily addressed through bilateral or other agreements. In order to track developments in IPR protection provisions in bilateral agreements, we create a database containing the level of IPR protection for digital content in Free Trade Agreements (FTAs) globally. The digital content-related IPR provisions in FTAs were categorized into three areas: i) compliance with the WTO TRIPS Agreement and adherence to international IPR treaties under WIPO, ii) provisions on copyright and related rights, and iii) enforcement- related provisions. We find a steady increase in the FTAs which include digital content-related IPR provisions.

Additionally, we look into regulatory trends concerning global platforms that dominate the distribution of digital content and services but, due to their vast scale and influence, create challenges that existing regulations struggle to address. To this end, the main features and characteristics of the EU Digital Services Act (DSA) were summarized. Previously, platforms were often granted exemptions from liability for copyright infringements occurring on their services. In contrast, the DSA emphasizes platforms' responsibility for copyright infringements. This reflects the growing significance of platforms in content distribution and copyright infringement cases.

Chapter 4 empirically analyzes the impact of IPR protection in FTAs on digital content trade. We explore the effects of FTAs with TRIPS-plus provisions for digital content (referred to as IPAs) identified in Chapter 3 on digital content trade. The analysis distinguishes between countries that signed IPAs between 2005 and 2019 and those that did not, comparing their global and bilateral trade patterns to derive the trade effects of IPAs. The study focuses on industries closely related to digital content such as telecommunications, computer and information services; royalties and license fees; and personal, cultural, and recreational services. In terms of total imports, countries with IPA experienced a relative increase in imports in the telecommunications, computer, and information services, and personal, cultural, and recreational services sectors compared to countries without IPA. On the export side, personal, cultural, and recreational services exports showed a positive relationship with IPA adoption. We also analyze by income level and find that the relative increase in imports of telecommunications, computer, and information services through IPAs was primarily led by lower-middle-income countries. In contrast, the relative increase in exports of telecommunications, computer, and information services was statistically significant in high-income countries, suggesting that IPA may have facilitated cross-border supply from high-income to lower-income countries in this sector. These results align with theoretical and intuitive predictions about how IPR protection could influence cross-border supply.

Chapter 5 looks into the necessity of imposing copyright protection liabilities on global platforms. Using a two-country theoretical model, we examine when it is necessary to impose copyright protection obligations on digital platforms from a global perspective that considers the total welfare of both countries. We also explore how the incentives to impose such obligations differ between countries when strengthening copyright protection liabilities from a total welfare perspective, and whether these countries can enhance such obligations through voluntary agreements, such as FTAs. From the perspective of total welfare, regulations that strengthen platforms’ copyright protection obligations positively impact innovation in both countries, thereby increasing producer surplus for content creators. However, consumer surplus may either increase due to the availability of more content or decrease due to reduced competition among creators resulting from monopolistic supply. In such circumstances, if regulations strengthening copyright protection obligations lead to a positive impact on consumer surplus compared to the monitoring level voluntarily chosen by platforms, the total welfare of the two countries is always positively affected. The analysis also examines whether each country independently has an incentive to impose stronger copyright protection obligations on platforms. It demonstrates that even if there is an incentive to enhance platforms’ copyright protection efforts from the perspective of total welfare, such regulations are unlikely to be implemented when each country makes decisions independently. In this situation, if the two countries are relatively symmetric in terms of the scale of content providers and consumers, we show that there is an incentive to strengthen copyright protection obligations through voluntary agreements such as FTAs.

Based on these findings, implications for Korea’s current EPA policy are presented. Countries with which Korea is pursuing EPAs can be broadly categorized into three groups based on the level of IPR protection in their existing FTAs and the current state of their domestic IPR legal frameworks. Countries in Group 1 have already signed FTAs with a relatively high level of IPR protection and established strong domestic legal frameworks to protect IPR. For Group 1, ensuring the effective enforcement of digital content copyright is critical. It is necessary to introduce provisions regulating IPR enforcement, particularly in digital environments. The enforcement clauses included in recent FTAs signed by the UK could serve as a useful reference. Countries in Group 2 have included comprehensive IPR protection provisions in their existing FTAs but whose domestic legal systems are insufficient to effectively protect digital content copyrights. For Group 2, it is worthwhile to include protection provisions not covered in their existing FTAs. Especially, many countries in this group are not parties to the WIPO Internet Treaties so their accession to these treaties should be a priority. Countries in Group 3 have not signed FTAs with significant IPR protection provisions and have domestic legal systems that make it challenging to efficiently protect digital content copyrights. For Group 3, it is more important to assist these countries in establishing and growing a foundation for the content market rather than immediately introducing high-level IPR protection provisions in the EPA. This can gradually increase the necessity of IPR protection. For instance, including agreements on joint content production or cultural cooperation protocols within the EPA can help create a foundation for the content industry by fostering skills and expertise through international joint production efforts. Additionally, sharing Korea’s experience in developing its content industry through strengthened IPR protection via initiatives like the Knowledge Sharing Program could further enhance the interest and participation of partner countries.