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APPENDIXES

APPENDIX 1-STATEMENT OF HON. MIKE SYNAR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA, MARCH 5, 1992

As you know, Mr. Chairman, I have been involved in this debate over film labelling and creative expression for some time. It is an issue we seem to revisit more often than most issues. I have come to better understand, and better appreciate, the film business and I respect all of the myriad parts and players that come together to finalize the films I have the pleasure of viewing.

In examining this matter again, however, I am not sure that anything has changed that would alter my position from previous years.

There are several matters that would have to be addressed to convince me that a bill such as H.R. 3051 is essential or even needed.

Where is the evidence of a great public outcry over the
"deception" of the viewing public. Who is the government
really protecting with such legislation? This is not the
equivalent of a public health issue requiring notice.

Who has the right to decide who is the "artistic author" and why is it limited only to "principal" directors, screenwriters and cinematographers out of the hundreds of persons who make the film? Who defines principal? What if these people all have different objections?

What is the economic impact on the copyright owner? Would there even be a film without the money put up for the production? How are these rights protected?

Why is it necessary for Congress to intervene in this
matter when it would be best decided in the collective
bargaining arena?

Finally, can anyone guarantee me that this label would be the end of labels? What about those groups that desire other types of labels such as often suggested by Senator Helms?

I always learn something from these hearings. To change the law, however, I think I need more. Unless direct economic and other harm can be proven, I do not believe that there is a need for a legislative response.

APPENDIX 2.-STATEMENT OF THE U.S. TRADEMARK ASSOCIATION,

MARCH 5, 1992

The United States Trademark Association ("USTA") appreciates the opportunity to express its views on H.R. 3051, legislation which would amend section 43 (a) of the Lanham Act to require that labels be affixed to films that have been materially altered by technological means after their original release. Although USTA does not take a position on the substantive merits of the bill, the Association believes that the Lanham Act is an inappropriate vehicle to deal with the issues embodied in particular new and technological developments arising in the motion picture industry. H.R. 3051 fails to parallel the general intent of the Lanham Act, the objective of section 43 (a) or the Act's relief provisions. Additionally, its enactment would make the Federal Trademark Statute a labeling act in order to address specific industry grievances. The Association maintains that U.S. Copyright law is better suited to address H.R. 3051's goals.

USTA, founded in 1878, is a 114 year old not-for-profit association with a membership of approximately 2400 corporations, package design firms, law firms and professional associations

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from across the United States and eighty countries committed exclusively to the development, preservation and advancement of trademarks. USTA's membership, which crosses all industry lines and includes both manufacturers and retailers, is united in the goals of maintaining effective commerce, promoting the interests of consumers and encouraging free and effective competition. Because of its diverse membership and as a matter of policy, USTA does not take positions on matters of public policy unless the underlying principles and functions of trademarks or the trademark system are directly involved.

While USTA possesses exceptional knowledge of trademarks and the Lanham Act, it does not claim any unique understanding of the technologies involved in the material alteration of commercial films as mentioned in H.R. 3051. Consequently, USTA limits its comments to the Lanham Act and makes no attempt to discuss the intricacies of technological alteration of commercial films.

STATUTORY INTENT/SECTION 43(a)

The Lanham Act is one part of the broader law of unfair competition and trademark law. The intent of the Act is to protect trademark owners and consumers from confusion or deception arising from the sale of goods and services in commerce. Specifically, section 43(a) provides remedies against certain forms of unfair competition that may be generally

identified as the use of marks and names likely to cause

confusion, false designation of origin or description, or false

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advertising.

This section is universally interpreted as being

aimed at practices which are economically analogous or related to trademark infringement and regulates business conduct in general without being directed at any one industry.

Certainly, when a work placed in commerce is altered so

significantly that commercial harm and public confusion result, protection to the holder and the public may be necessary and appropriate under section 43 (a) of the Lanham Act. In fact, such relief has been given under its provisions. Gilliam v. American Broadcasting Co., 538 F.2d 14 (2d Cir. 1976). Absent such a specific showing, the Lanham Act and section 43 (a) should not be used for addressing the overall interests of artists whose works are altered.

THE LANHAM ACT IS NOT A LABELING ACT

The

However, in his Summary of Legislation concerning H.R. 3051 (July 25, 1991), Representative Mrazek noted that "in order to provide a modest degree of protection to both film audiences and artists, The Film Disclosure Act of 1991 seeks to amend the nation's 'truth in labeling' law, section 43 (a) of the Lanham Act". Lanham Act is not a labeling act. Its history has focused on broad conceptual definitions in the law of unfair competition, as applied by the courts to specific factual situations. As more fully discussed in the following section, turning it into a labeling act would do more harm than good in both concept and

application since H.R. 3051 appears to tolerate little in the way

of judicial discretion.

LANHAM ACT RELIEF PROVISIONS

Contrary to the Lanham Act's monetary and injunctive relief sections which are based on principles of equity and fairness, H.R. 3051 has a relief provision which is exceedingly harsh [section 43 (c) (2) (A) and (B); equitable relief, actual damages and statutory damages of up to $100,000]. Punitive damages of this sort are not allowable under the Lanham Act. Getty Petroleum Corp. v. Bartco Petroleum Corp., 858 F.2d 103 (2d Cir. 1988). Yet the initiative makes punitive damages mandatory under proposed section 43 (c) (2) (B) (i) when a person fails to make a good faith effort to locate certain individuals. This provision is inconsistent with existing Lanham Act provisions because it removes all judicial discretion and ignores the underlying rationale for punitive damages--to punish for willful, intentional misconduct and to deter further acts of comparable severity.

THE LANHAM ACT IS NOT FOR RESOLUTION OF SPECIFIC INDUSTRY

GRIEVANCES

The potential amendments of section 43 (a) to expressly protect the interests of artists from the alterations of motion pictures by means of new technologies raises the further problem of burdening this general versatile unfair competition provision with a lengthy and narrow remedy limited to the problems of a