to promote our trading partners' full and fair implementation of their obligations under the Berne Convention for the Protection of Literary and Artistic Works

("Berne Convention").

NMPA believes H.R. 789 runs afoul of U.S. obligations under the Berne Convention and, if enacted, could seriously undermine U.S. efforts and credibility in seeking meaningful copyright protection abroad.

H.R. 789 would, among other things, amend section 110(5) of the Copyright Act to exempt from the obligation to pay copyright royalties public performances by means of television or radio sets located in bars, restaurants and other business establishments unless a direct or indirect charge is made to hear the performances. An exemption of this breadth exceeds the scope of Bernecompatible derogations from the exclusive public performance right.

Article 11 of the Berne Convention requires member countries to grant authors of musical works the exclusive right to authorize the public performance of their works and any communication to the public of the performance of their works. Article 11bis(1) makes clear that the right of communication to the public extends to "public communication by loudspeaker or any other analogous instrument transmitting by signs, sound, or images the broadcast of the work." Articles 11 and 11bis do not provide for any relevant exceptions to or exemptions from these rights.

International practice condones only certain "minor

reservations," such as the performance of musical works as part of religious services or by military bands in certain limited circumstances.'

The current language of section 110(5) of the Copyright Act exempts the communication of a transmission embodying a performance or display of a work by the public reception on "a single receiving apparatus of a kind commonly used in private homes" (emphasis added), unless a direct charge is made or the transmission received is further transmitted. An ad hoc group of experts assembled by the U.S. Department of State to evaluate the Copyright Act in advance of U.S. adherence to the Berne Convention viewed the current section 110(5) exemption as consistent with Berne largely because of its narrow focus on the single receiving device common in home use. The ad hoc group based its assessment on World Intellectual Property Organization guidance on the intent and proper interpretation of Article 11bis:

In places where people gather (cafes, restaurants, tea-rooms,
hotels, large shops, trains, aircraft, etc.) the practice is growing of
providing broadcast programmes.... The question is whether the
license given by the author to the broadcasting station covers, in
addition, all the use made of the broadcast, which may not be for
commercial ends.

The Convention's answer is "no." Just as, in the case of a relay of a broadcast by wire [cable], an additional audience is

1 Guide to the Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971), World Intellectual Property Organization, WIPO Pub. No. 615(E) at 65 (1978) (hereinafter "WIPO Guide").

2 Final Report of the Ad Hoc Working Group on U.S. Adherence to the Berne Convention, reprinted in 10 Colum.-VLA J.L. & Arts 513, 528-529 (1986).

created, so, in this case too, the work is made perceptible to
listeners (and perhaps viewers) other than those contemplated by
the author when his permission was given. Although, by definition,
the number of people receiving a broadcast cannot be ascertained
with any certainty, the author thinks of his license to broadcast as
covering only the direct audience receiving the signal within the
family circle. Once this reception is done in order to entertain a
wider circle, often for profit, an additional section of the public is
enabled to enjoy the work and it ceases to be merely a matter of
broadcasting. The author is given control over this new
performance of this work.'

By amending the scope of the existing section 110(5) exemption to delete

the reference to apparatus of kind commonly used in private homes and to allow

-- if not encourage

the use of multiple receiving devices, H.R. 789 and similar proposals appear to exceed the bounds of accepted and acceptable minor reservations. In practice, such an overbroad exemption would serve to deprive music creators and copyright owners of rights and royalty payments to which the Berne Convention dictates they should be entitled.

Moreover, the resulting harm would not be limited to the loss of domestic revenues. Nations that follow the accepted view on minor reservations can be expected to criticize the approach reflected in H.R. 789 and to point to it in defense of Berne-incompatible provisions in their own domestic laws. Of equal concern, a broadened exemption in U.S. law could serve as an unfortunate "model" for other countries' legislative reforms and could ultimately reduce royalties earned in foreign markets. As the Committee is well aware, the

3 WIPO Guide at 68-69.

copyright industries -- of which music is an important part -- post one of the most significant positive contributions to the U.S. balance of trade.

Finally, we are concerned that failure to satisfy Berne Convention obligations will subject the U.S. law to challenge under the terms of the World Trade Organization ("WTO") Dispute Settlement Understanding. The United States, through three Administrations and with bipartisan Congressional support, worked hard to see Berne Convention standards of copyright protection backed up by the "teeth" of an international enforcement mechanism. accomplished through the Agreement on Trade Related Aspects of Intellectual Property ("TRIPS") concluded as part of the Uruguay Round. It makes no sense now for the United States to take legislative action that so blatantly scoffs at both the Berne Convention and the WTO dispute resolution process that will serve as the mechanism for enforcement of TRIPS obligations.

H.R. 789 would do incalculable damage to the interests of America's writers and owners of copyrighted music. In NMPA's view, the bill stands to prejudice the position of the United States in seeking improved levels of intellectual property protection in foreign markets and would expose our nation to international criticism and even sanction for failure to satisfy our obligations under the Berne Convention.

H.R. 789 is not about "fairness." It is about breaking well-established international rules. We urge members of the Committee to consider the

implications of pending music licensing proposals not only on music users, but on

the legitimate interests of music creators and copyright owners, domestically and

abroad.