Mr. KASTENMEIER. Do you not consider that 601 and chapter 6 in its present state is a whittling down of the manufacturing clause? Mr. VAN ARKEL. In one important respect we think it is, Mr. Chairman. This is one that we do not object to. It seems to me that the most important change that the Register has proposed in the clause is that violation of the clause shall not entail a complete abandonment of copyright. That is to say, insofar as movie rights, and so forth, are concerned, even if a work is produced in violation of the manufacturing clause the author would continue to have those rights. We agree with that recommendation and we welcome, indeed, this additional protection for American authors. It has no relevance to our concern, and therefore we think it is a perfectly fair amendment to protect the interests of American authors and others. Now as to other changes in it, it is true that there are certain other changes but we have not raised objection to them in our statement and they are largely, we feel, of a technical nature that do not prejudice what we feel to be our essential position. I would like to say, however, that I had just a moment to glance at the statement of Mr. French this morning with respect to the recommendations of the BMI for revision of the copyright law, and I agree very strongly with the recommendations that Mr. French makes in this statement for the Book Manufacturers Institute. I have to say that I scanned it hurriedly, so I may have to come back to you and say I disagree with something. But insofar as I have looked it over, I agree strongly with his proposed amendments. Mr. KASTENMEIER. Do I understand your position really to be that you would approve of chapter 6 as it now stands, you would prefer to exempt Canada from the manufacturing clause, which would be a concession, and you would change the figures in terms of number of permitted volumes for any single edition? Mr. VAN ARKEL. That is right. Mr. KASTENMEIER. And you would change some language with reference to reproduction proofs? Mr. VAN ARKEL. No, with respect to that issue, Mr. Chairman, I would be less than candid if I did not say that we would support the position which other witnesses have taken before the committee that if the Congress deemed it wise, it would be desirable to clarify the language to make it clear that reproduction proofs are covered within the manufacturing clause. However, failing such an amendment, we are content with the proposal which the Register has made on this subject matter which is essentially to leave the law as it is, leave it to a later judicial determination as to whether reproduction proofs are or are not covered. I say that because of our confidence that our position is correct that reproduction proofs are covered by present statutory language. Mr. POFF. Would the chairman yield? Mr. KASTEN MEIER. Yes, I yield." Mr. POFF. I would like to clarify your answer to one of the chairman's questions. Am I correct, or not, that you use Canada only as an example of a country that might be exempted from the manufacturing clause? Mr. VAN ARKEL. Yes. Mr. POFF. You propose an amendment that would give the Executive the discretion to grant exemptions in those areas where the wage level is comparable to that in the United States? Mr. VAN ARKEL. That is right. Mr. PoFF. Currently this would apply to Canada? Mr. VAN ARKEL. That is right. Mr. POFF. And likely not elsewhere? Mr. VAN ARKEL. I don't know any other place. There may be other places. I have not examined statistics. Of course, you are quite right, Mr. Congressman, I thank you for pointing it out, that we are not asking for legislation with respect to Canada. We think its practical impact, as of this time, would be limited to Canada. But we say if you will adopt an amendment saying that countries with comparable wage conditions shall be exempted from the manufacturing clause, then, obviously, it gives other foreign countries an incentive to lift their wage rates to the level that we enjoy in this country. This, we think, is desirable internal and international policy. Mr. POFF. I ask your pardon, but I wanted that point to be clear, and I am sure the witness did, too. Mr. VAN ARKEL. I am grateful you asked that. Mr. KASTEN MEIER. Is it not true that wage rates for all commodities differ throughout the world from the standards set by the United States? Mr. VAN ARKEL. I wish I could give a more definite answer to that question, Mr. Congressman. I simply have not compared wage rates in any area other than the printing trades. Mr. KASTENMEIER. Would it not be your belief? Mr. VAN ARKEL. I assume that is probably true. But I also point out that there are few other commodities that can be shipped in an envelope, that is, where you have had important amounts of work done, work which is expensive to do, which takes a long time to do, which you can put in an envelope and put on a jet airplane and have in this country within a matter of a few hours. If you are talking about sewing machines, bicycles, steel, or any other commodity, you have to absorb substantial costs of shipment, you have the problem of delays in shipment and all the rest. These are missing, particularly in the area of typesetting and of reproduction proofs. Mr. KASTEN MEIER. Actually, this is a clause for the protection of the American printing industry, is it not? Mr. VAN ARKEL. Well, Mr. Chairman, I would like to repeat that the origins of this clause show very clearly that it was not a protective device. It was a condition attached to a domestic privilege and it was done with the consent of all the parties who were interested at that time. Now it is true that this thing has been phrased in terms of free trade against protectionism. I think that is an entirely wrong way to look at it. I insist once more that we are talking about excluding American manufacturers by American law from the American domestic market, and that this is not a question of protectionism or free trade, this is a question of a desirable way to handle copyright. We are constantly told that the manufacturing clause has nothing to do with copyright, that it has no place in the copyright law. It is obvious that it has the most intimate relationship to American domestic copyright. There is a question whether or not it is an appropriate condition to impose on the grant of an exclusive monopoly in the United States. Mr. KASTEN MEIER. Is it true as the witness stated yesterday that the United States is the only country that has a manufacturing clause in its copyright law? Mr. VAN ARKEL. I would like to say a word about that. I have gone into that in my statement, Mr. Chairman. Practically every country in the world except the United States, in the patent field, has what is called a working requirement, including England. Under the working requirement, unless you manufacture in the country granting the patent, you lose your patent right. If you will look at Mr. Warner's statement, there appears to be reason to believe that this was the antecedent of the manufacturing clause in this country in the copyright field. Now I have heard of no American activity to remove the working requirement from British law as an exclusionary device directed against American manufacturers, and I would regard it as a highly questionable intrusion into domestic British affairs for Americans to take any such action. I think this is an appropriate requirement for England to impose if it chooses. Mr. Frase yesterday mentioned the fact that some 20 countries have become parties to the Florence Convention, thereby eliminating any tariffs on books. What he failed to state was that there are all kinds of ways of skinning a cat. France, for example, flatly forbids the importation of large quantities of books into its country. There is no point in talking about a tariff on goods that you are not allowed to ship into the country. Mexico has the requirement that if you don't translate into Spanish within 3 years, you lose your copyright. Brazil and Portugal require licenses to import books and you have an awful time getting a license if your book is in Portuguese. In short, any effort to portray us as kind of dogs in the manger who are excluding stuff, and other countries as generously permitting the importation of anything we want to send them, is entirely incorrect. Many of them achieve it through currency controls, for example. Sure, you can get a copyright in the country, but if you try to exploit the copyright, you can't take your profits out of the country, which is of course a limitation on the copyright. We permit foreigners to exploit copyright here and to take the profits out of the country. In short, to portray us as some kind of devils in this respect and other countries as completely free and easy is an entirely erroneous impression for anyone to leave. Mr. KASTEN MEIER. Mr. St. Onge. Mr. KASTEN MEIER. Mr. Tenzer. Mr. TENZER. I have no questions because I did not hear yesterday's testimony. I would like to assure the witness that this committee will give a qualitative rather than a quantitative analysis to the testimony in accordance with your remarks. Mr. VAN ARKEL. I am grateful for that thought. Mr. POFF. Of course, following the sentiment my colleague has just expressed, it sometimes becomes necessary in evaluating qualitatively to consider the impact of certain quantities. That is the line my questions will take right now. First, I will quote from the statement of the Register in order that you may comment on it. He says: The 3,500-copy figure was suggested as the point, in the present book market, beyond which it is generally more costly for a publisher to import copies than to manufacture an edition here. As such it would be the equivalent of 1,500 copies in the market of 1949, when the statute was amended to provide a 1,500copy limit on importation. Do you care to comment on that statement? Mr. VAN ARKEL. Yes, I will be glad to, Mr. Congressman. As I stated earlier, the 1949 amendments, which the printing trades unions supported, adopted a simple single test; namely, that foreign manufacturers ought to have the right to test the American market to determine whether or not it was economically feasible to bring out an American edition. Now I think it is obvious from the Register's own statement that he has departed from that standard. He is not now talking about what is required to test the American market. He is in effect converting that into a test of profitability of production in the United States. What he seems to me to be saying in that language that you quoted is that it is not economically feasible to prepare editions of less than 3,500 copies in the United States, and, therefore, we are going to grant this exclusive monopoly on editions of less than 3,500 copies of foreign manufacture. Now we think that is a wrong standard. We think the standard ought to remain what it has been; namely, the testing of the market standard. I have stated that we have no objection, in view of the fact that the market is much larger now than it was in 1949, to a modest increase in that amount. But we say that to increase it by substantially over 100 percent at one jump is totally unwarranted. I repeat that I have not heard anyone say that the standard of 1,500 copies is insufficient for testing the market under present-day conditions. So that if you adopt the standard which the Congress has historically used in dealing with this problem, I can see no justification whatsoever for a jump of over 100 percent. Mr. POFF. Now, language has a habit of meaning one thing to one person and something else to another person. Mr. VAN ARKEL. That is why Congressmen hold hearings. Mr. POFF. Exactly. "Testing the market" means something to me, but I am not sure it means exactly what it should mean. Would you care to define that phrase? Mr. VAN ARKEL. My understanding of the phrase, Congressman, is that prior to 1949 you could only bring in one copy of the work. Obviously with one copy you cannot determine what the reaction of the American market to that one book will be. However, what the foreign manufacturer may now do under present law is to bring in 1,500 books. He can put them on sale in, let us assume, 10 major bookstores. If they sell like hotcakes and are quickly exhausted, he knows that there is a demand in this country sufficient to warrant the publication of an American edition. If all 1,500 stand idly on the shelves for 5 years, he knows then that an American edition would be a waste of time and money. This, I say, was the inception of the clause. This, I think, is the appropriate ground on which it should be appraised. We think that, appraised by any such standard, that the 3,500 requirement is way over what anyone can demonstrate is the necessity of the situation. Mr. POFF. Do you have any figures indicating the amount or the percentage increase in the market since 1949? Mr. VAN ARKEL. I am perfectly willing to accept the statements which appear. I believe Mr. Frase covers this in some of the tables attached to his presentation. On page 36 of this statement, Table 5: Growth of the U.S. Printing and Publishing Industry, he has the rates for 1947, 1954, 1958, and 1963. In the bookbinding and related industries-well, it has gone up about a 100 percent in that. In book publishing I note it has gone up even more than that. Mr. POFF. I understood that the increase might be appropriately based on the acknowledged fact that the market has expanded. Mr. VAN ARKEL. I don't think that follows, Mr. Congressman. Mr. POFF. It does not necessarily follow in tandem. Mr. VAN ARKEL. No. What the foreign manufacturer wants, what he has under present law and what we have no objection to, is the right to bring into this country a sufficient number of books to find out whether there is a popular demand for them. Now that figure is not necessarily related to the total amount of book publishing done in this country. It might have been necessary, for example, in 1820, when the book publishing industry was in its infancy in this country and production was very low, it might even then have been necessary to introduce 1,500 copies in order to test the market. By the same token, in a very largely expanded market that may still be adequate. In any event, what I would like to see is debate focused on that issue and not on the issue of what size edition is profitable for the American manufacturer to produce, as the Register in effect, it seems to me, in his comments suggests. Mr. PoFF. Do I also correctly understand that while you would favor the increase up to 2,000 as a preference to the proposal to increase it to 3,500, you would not make this the guiding criterion in the decision? Mr. VAN ARKEL. No. As I say, we have no objection to some modest increase in this. We recognize that the market is bigger, our country is more populous. It may well be that a case can be made out for the importation of an additional number of copies, but we think in one fell swoop to more than double it has not been shown to be necessary. We are fearful that this will mean that quite a number of editions will be published outside the United States which otherwise would be published here, and that therefore this major change in the law should not, at this time, be undertaken. Mr. POFF. Thank you. Mr. KASTENMEIER. Thank you very much, Mr. Van Arkel. That was an excellent statement. |