Administration knows of no evidence indicating that the public confuses a colorized version of a movie with the original black and white movie. Furthermore, the Administration questions whether, if some confusion is shown, a simple label stating that the movie is colorized, or otherwise edited, would resolve the issue effectively. To require a system of notification and labels regarding the opinions of the artistic authors of the films superimposes the complex copyright issue of moral rights on a smoothly operating general law of unfair competition.

The Trademark Act is the wrong body of law in which to consider the moral rights question presented by H.R. 3051. The proposed amendment establishes a bad precedent for amendments to Section 43 of the Trademark Act. Adding an industry-specific provision to an already broadly applied general unfair competition law would set an undesirable legislative precedent and could erode the broad applicability of the existing provisions. Additionally, the scope and complexity of the proposed amendment go far beyond the recognized principles of unfair competition and appropriate remedies embodied in Section 43 (a).

The purpose of Section 43 (a) of the Trademark Act is to preserve the integrity of a commercial enterprise by preventing specified types of misrepresentation that damage that enterprise's reputation. While disclosure of the source of, or a fact about, a potentially misrepresented or falsely designated product or service may overcome a claim under Section 43 (a), it is not in any sense a labeling provision. H.R. 3051 is primarily a labeling law, with detailed obligations and strict liability for even accidental non-compliance, affording little judicial discretion.

Section 43 (a) is subject to the general monetary and injunctive relief provisions of the Trademark Act (15 USC 1116, 15 USC 1117, 15 USC 1118), which are to be applied fairly at the discretion of the court. The H.R. 3051 amendment to Section 43 contains its own extremely harsh relief provisions, including mandatory punitive damages where an individual fails to make a good faith effort to locate the specified artistic authors of a film.

Film Alteration and Relevance of Section 43(a) of the Trademark Act.

The Trademark Act provides for the registration and protection of trademarks. Section 43 (a) of the Trademark Act is recognized by the courts as a general Federal unfair competition law. The broad application of Section 43 (a) has protected authors from certain types of misrepresentation because the particular misrepresentation was considered unfair competition under the law. Thus, Section 43(a) has been a vehicle for the protection of authors' moral rights when the injury to these rights is considered unfair competition. However, Section 43 (a) does not,

and was not intended to, expressly protect any moral rights of an author, nor is it the place to create increased moral rights for authors of films.

In 1989, the Patent and Trademark office (PTO) submitted a report to this Subcommittee entitled "The Trademark Act of 1946 and Technologies for Alteration of Motion Pictures" in response to the Subcommittee's request that the PTO examine "the impact of new technologies for the alteration of existing motion pictures on consumers, artists, producers and distributors of motion pictures, and other affected parties." In particular, the PTO addressed "the extent to which Section 43 (a) of the Trademark Act may apply to use of the new technologies to alter existing motion pictures without the consent of the principal director and principal screenwriter who participated in their creation."

In the report, the PTO discussed the pertinent cases protecting creative artists under both common law and Section 43(a) unfair competition theories from violations of their moral rights arising from false attribution or unconsented alteration of their work. Because it recognizes the applicability of Section 43 (a) of the Trademark Act to prevent falsely attributing a materially altered artistic work to the creators of the original work, the PTO discussed, inter alia, the case of Gilliam v. American Broadcasting Company, 538 F.2d 14 (2d Cir. 1976). In that case, the British comedy group Monty Python sought to restrain ABC from broadcasting edited versions of three separate programs written and performed by Monty Python for the BBC. Plaintiffs alleged that ABC's editing of the programs for television far exceeded the limits of editing allowable under their contract, that such editing mutilated the works and that Plaintiff's reputation would suffer irreparable damage if the programs were broadcast. Plaintiffs alleged copyright infringement and unfair competition under Section 43 (a) of the Trademark Act. The Court of Appeals granted a preliminary injunction and noted, with respect to the Section 43(a) claim that "courts have long granted relief for misrepresentation of an artist's work by relying on theories outside the statutory law of copyright, such as ... unfair competition." The Court saw the Trademark Act as a vehicle to "vindicate the author's personal right to prevent the presentation of his work to the public in a distorted form." 538 F.2d at 24. In the concurring opinion, Judge Gurfein expressed concern that Section 43(a) is not a substitute for moral rights and "does not deal with artistic integrity. goes to misdescription of origin and the like." Id at 27. suggested that a label indicating that the plaintiffs had not approved ABC's editing would remove all doubt as to a violation of Section 43 (a).

It only

He

In the report, the PTO drew the following conclusions:

After consideration of the comments and our own review of the legislative history, cases and other authorities, we conclude that in certain circumstances section 43(a) may provide a right of action to prevent technological material alteration of existing motion pictures without the consent of persons who participated in the creation of those motion pictures, including principal directors and screenwriters. We do not believe, however, that section 43 (a) should be amended to create a specific right for principal directors and principal screenwriters to prevent material alterations' of motion pictures over which they exercised some artistic control. If more extended moral rights

protection for creative artists is desired, it should not be sought under the Lanham Act.

The PTO concluded, also, that the availability of Section 43(a) to restrain use of the new technologies for film alteration would be limited, in all likelihood, to the presently-existing technology of colorizing, noting that:

[A] plaintiff would have to show that its original work was
materially altered, ie, that it was altered to an extent
sufficient to create a substantially different work.
Second, false attribution of the altered work to the
plaintiff must be shown, and, further, that such attribution
is likely to damage plaintiff's reputation and confuse the
public as to the origin of the work. The plaintiff may also
have to show a discernible competitive relationship with the
defendant... Depending on the facts of the case, a label or
legend disclaiming approval of the altered work by the
creators of the original work might be a valid defense...

Reducing the Burden of Government Regulation.

The President has consistently advocated a reduction of regulatory burden on the public, which includes both industry and the individual citizen. He has directed the Executive agencies to review all existing and proposed regulations and eliminate those that are unjustified or outdated. He has stressed the importance of analyzing each and every new proposal of Government-imposed regulation from an economic perspective of costs versus benefits. This principle applies equally to legislative regulation of an industry. In this case the benefits

of H.R. 3051 are ambiguous, while the costs appear to be substantial. Not only has the film industry indicated the potential for serious negative economic consequences from this bill, but the bill would have a negative impact on the general Federal law of unfair competition, under Section 43 (a) of the Trademark Act. Government should not act in this area until there is sufficient information to warrant a conclusion that a

significant problem exists and that this problem is not

adequately addressed by existing legislation. Then an equitable and both a legally and economically viable solution may be proposed.

Conclusion.

The Administration is opposed to H.R. 3051 and recommends against amending the Trademark Act as a means to create statutory moral rights for artists, in particular for film artists who have not previously been defined as authors under the law. Such action would undermine the broad applicability of Section 43 (a) of the Trademark Act as a general unfair competition provision. The issue of moral rights should be addressed, if at all, in the context of the copyright law. Furthermore, the provisions outlined in H.R. 3051 create an inequitable and burdensome system of governmental regulation, the benefits of which are ambiguous and which may inflict economic harm on the strong U.S. film industry.

The Office of Management and Budget has advised that there is no objection from the standpoint of the Administration's program to the submission of this letter to Congress.

Sincerely,

Mall & Willlin; I

Wendell L. Willkie, II

APPENDIX 7.-LETTER FROM ARNOLD P. LUTZKER, ATTORNEY, DOW, LOHNES & ALBERTSON, TO CONGRESSMAN DAN GLICKMAN (WITH ENCLOSURES), APRIL 10, 1992

During the course of the Hearing on H.R. 3051, you raised a question regarding the Japanese treatment of the motion picture "The Last Emperor" and the editing that was associated with it. Enclosed are press articles discussing the background of that matter.

If we can be of further assistance to you, please don't hesitate to let us know.

APL:cjs

Enclosure

cc: chairman William J. Hughes

Ms. Elizabeth Fine

Very truly yours,

Arnold P. Lutzker