BERNE CONVENTION IMPLEMENTATION ACT OF

1987

WEDNESDAY, SEPTEMBER 16, 1987

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES,

AND THE ADMINISTRATION OF Justice,

COMMITTEE ON THE JUDICIARY,

Washington, DC.

The subcommittee met, pursuant to call, at 10:50 a.m., in room 2141, Rayburn House Office Building, Hon. Robert W. Kastenmeier (chairman of the subcommittee) presiding.

Present: Representatives Kastenmeier, Morrison, Berman, Boucher, Cardin, Moorhead, Hyde, Lungren, Coble, and Slaughter.

Staff present: Michael J. Remington, chief counsel; David W. Beier, counsel; Virginia E. Sloan, counsel; Thomas E. Mooney, associate counsel; Joseph V. Wolfe, associate counsel; and Audrey K. Marcus, clerk.

Mr. KASTENMEIER. The subcommittee will come to order.

The gentleman from California.

Mr. MOORHEAD. Mr. Chairman, I ask unanimous consent that the subcommittee permit the meeting to be covered in whole or in part by television broadcast, radio broadcast, and/or still photography, in accordance with rule 5 of the committee rules.

Mr. KASTENMEIER. Without objection, it will be done.

I apologize to the witnesses and to those others who have convened here this morning for the lateness in commencing with this hearing. This is, for the Congress, a Constitution day, and part of the process involved is the taking of the picture of the House of Representatives, and this has caused us some delay. Other proceedings will take place later. This afternoon, I trust we will have concluded both the hearings and markup of a noncontroversial piece of legislation following the hearings.

Today is really the third day of hearings on the Berne Convention, and I suspect as we celebrate 200 years of the Constitution today it is appropriate that we are holding legislative hearings on that which is an outgrowth of the Constitution in terms of special provisions in the Constitution. The first provision relates to intellectual property, to the extent that it is the origin of our authority to grant and control proprietary rights in this country and creative rights. The second aspect of the Constitution relates to international law. We are not talking about a treaty, per se, we are talking about an international convention to which it is proposed we adhere. That, too, seems to have a nexus with the Constitution. So (227)

what we are doing here has very special relevancy, in a sense, to the celebration of the Constitution.

The first 2 days of hearings were devoted to an overview of issues presented by adherence to Berne. Today, we begin perhaps a series-at least more than one hearing-on particular issues raised by Berne-moral rights, jukeboxes, architectural works, and formalities-and it is moral rights to which we devote our attention this morning.

The bill I introduced, H.R. 1623, does contain a separate section relating to moral rights. It has been the subject of extensive analysis and debate and therefore served the purpose for which it was written, to enable Congress to determine whether Berne requires a separate moral rights section and, if it does, how should such a section be drafted.

H.R. 2962, the bill introduced by my colleague, Mr. Moorhead, and supported by the administration, is on this question somewhat different. It does not contain a moral rights provision. In fact, it specifically finds that no separate provision is needed and that current Federal and State laws are sufficient to enable this country to adhere to Berne.

So we welcome, in a sense, some diversity of statutory language so that we may fully explore this. At the same time, perhaps it is implausible that we should seek, as we do, some sort of consensus in terms of approaching the question generally of adherence.

I would like to call on the first panel, unless the gentleman from California would like to make a statement. I yield to the gentleman from California, Mr. Moorhead.

Mr. MOORHEAD. Thank you, Mr. Chairman.

I would like to commend you for your continued leadership on this complex issue. When we introduced the legislation which is the subject of these hearings, we did not have any preconceived notion on how to solve some of the more difficult problems, but what we did have in mind is that if these problems could be worked out it would be in the better interest of the United States to join the Berne Convention.

I still believe that the differences between our law and that of the Berne treaty can be worked out and made clear. In a letter sent to our subcommittee last week, the American Bar Association indicated its support for U.S. adherence to Berne. In that letter, the president of the ABA, Robert MacCrate, states that U.S. adherence to the Berne Convention is the most important international copyright issue facing the United States and the American copyright community today.

In testimony which we will receive this morning, Peter Nolan, a well known and respected copyright authority, will place on our record the strong support of the motion picture industry for U.S. adherence to Berne. I agree with Mr. Nolan when he says that Congress must be very clear in drafting legislative language as to what we intend regarding the status of moral rights in the United States.

In our implementing legislation, either as a congressional finding or otherwise, we can state explicitly that Berne is not self-executing and that Berne does not in any way affect the present state of

American law on moral rights. I cannot imagine a Federal court ignoring such a congressional statement.

I believe Berne adherence is important to this country, and if we can work out the differences, which I think we can, we must all work very hard for enactment. Otherwise, legislation like this, regardless of its merits, will most likely fall between the cracks. Thank you, Mr. Chairman.

Mr. KASTENMEIER. I thank my colleague for his statement.

I am pleased that a number of members of the committee are here this morning.

We will hear witnesses in two panels, and the first panel consists, as my colleague has indicated, of Mr. Peter Nolan, vice president and counsel of Walt Disney Productions, a former lawyer in the Copyright Office, and appearing on behalf of the Motion Picture Association. We are very pleased to have him here. Also on this panel is Mr. Kenneth Dam, who is IBM's vice president for law and external affairs and, as anyone in Government recalls, was deputy secretary of state from 1982 to 1985, wherein he served very nobly. We are pleased to greet and ask to come forward both Mr. Nolan and Mr. Dam.

To the extent that witnesses have long statements, we of course would encourage-and I say this for all witnesses-a summarization of your statements, if possible, at least of any longer statement that you would have offered for the record.

Mr. Nolan.

TESTIMONY OF PETER NOLAN, VICE PRESIDENT-COUNSEL, WALT DISNEY PRODUCTIONS, ON BEHALF OF THE MOTION PICTURE ASSOCIATION OF AMERICA; AND KENNETH W. DAM, VICE PRESIDENT, LAW AND EXTERNAL RELATIONS, IBM

Mr. NOLAN. Thank you, Mr. Chairman.

I am, as you said, vice president of the Walt Disney Co., and I am speaking today on behalf of the Motion Picture Association of America as well as the Walt Disney Company. I have practiced law now for 19 years in the intellectual property law area, and much of this has involved the international protection of copyrighted works. I want to thank you, Mr. Chairman, as well as the subcommittee members and their staff, for inviting the Motion Picture Association to present its views to you today on this very important issue. The members of the Motion Picture Association of America, as you may know, produce and distribute by far the vast majority of theatrical and television motion pictures created in this country. As reported as recently as last week by the noted economic journalist, James Flanigan, the entertainment industry in this country is one of the largest exporters of products and services produced in the United States. Each year, the motion picture industry contributes over $1 billion in favorable balance of trade.

We are very proud to make this contribution to the positive side of our balance of trade ledger, but our country also benefits from exporting these motion pictures in another, nonmonetary way. As Mr. Flanigan reported in his September 9 column, which he entitled, "The American Dream Is Best Export U.S. Has," the motion pictures and television programs we export are so popular because

they portray and implicitly promote the American dream of freedom and opportunity.

In that column, he stated, "The audience wants to see the American way of life. For viewers the world over, America is the place where the individual has the chance to make a better life," and that is a very powerful message for people in other countries. That is the good news.

The bad news is that there are many countries in this world that do not protect our motion picture products. Our motion pictures are being copied on a wholesale basis, and our revenues are being stolen by pirates outside the United States, in many cases because of inadequate laws or the lack of a will by the Government involved to stop piracy in its tracks. Indeed, the Motion Picture Association estimates that the U.S. film companies lose each and every year approximately one-half billion dollars in revenues because of these inadequate laws. Now that is a lot of money by anyone's standards.

I bring this to your attention so that you will understand why we are now supporting adherence to this very important copyright treaty. In the past, the MPAA and its member companies were concerned about joining the Berne Convention because of a feeling that such adherence would trigger enactment of a Federal moral rights law. This would limit, we feel, our freedom to produce motion pictures in this country.

That concern still exists, but two changes have occurred which have made the Motion Picture Association take this new position. First, as I have explained, we are confronted with enormous piracy outside this country, and we have accordingly become keenly aware of a number of deficiencies in the protection of our works that Berne adherence could remedy. Second, developments in the laws of unfair competition, trademark, privacy, and the like, now allow the United States to join the Berne Convention without enacting new legislation on moral rights.

Our position in support of U.S. adherence to Berne is premised on our firm belief, supported by the overwhelming weight of scholarly opinion, that the Berne Convention is not self-executing and that the implementing legislation will contain no provisions containing moral rights.

Because this will be one of the few opportunities where the motion picture industry in this country has a chance to explain why we are supporting adherence, I would like to briefly set forth the advantages to adherence as the motion picture companies see it. Most of these advantages relate to the problem of film piracy. First of all, it would provide retroactive protection of U.S. motion pictures. Joining the Berne Convention would allow important U.S. produced motion pictures to be protected by copyright for the first time ever in certain Berne countries that don't have a copyright treaty at all with the United States.

Second, and perhaps more significantly, there are a number of classic motion pictures first released before 1955-that was when the Universal Copyright Convention came into force-that have never been protected in a number of Berne countries, like the United Kingdom, Australia, and other British Commonwealth countries. This is because motion pictures, after they were first re