Many of the shortcomings of the TRIPS texts are in the field of neighboring rights, where it is hard politically to establish the right of national treatment. The North America Free Trade Agreement (NAFTA) appears more successful than TRIPS in establishing national treatment obligations for future "rights" in copyrights and neighboring rights. B. THE NORTH AMERICAN FREE TRADE AGREEMENT The recently completed North American Free Trade Agreement has an extensive chapter covering intellectual property rights. While the provisions in this chapter are not perfect from an American prospective,25 in general, terms of this chapter probably represent the strongest recent international agreement the United States has been able to secure in the area of intellectual property rights. As regarding copyright, Chapter 17 of NAFTA incorporates by reference the minimum level of protection guaranteed by the Geneva Phonogram Convention and the Paris text of the Berne Convention. Article 1703 of the Agreement governs national treatment, and provides as follows: (1) Each Party shall accord to nationals of another Party treatment no less favorable than it accords to its own nationals with regard to the protection and enforcement of all intellectual property rights. In respect of sound recordings, each Party shall provide such treatment to producers and performers of another Party, except that a Party may limit rights of performers of another Party in respect of secondary uses of sound recordings to those rights its nationals are accorded in the territory of such other Party. (2) No Party may, as a condition of according national treatment under this Article, require right holders to comply with any formalities or conditions in order to acquire rights in respect of copyright and related rights. (3) A Party may derogate from paragraph 1 in relation to its judicial and administrative procedures for the protection or enforcement of intellectual property rights, including any procedure requiring a national of another Party to designate for service of process an address in the Party's territory or to appoint an agent in the Party's territory, if the derogation is consistent with the relevant Convention listed in Article 1701(2), provided that such derogation: (a) is necessary to secure compliance with measures that are not in- (b) is not applied in a manner that would constitute a disguised re- (4) No Party shall have any obligation under this Article with respect to procedures provided in multilateral agreements concluded under the auspices of the World Intellectual Property Organization relating to the acquisition or maintenance of intellectual property rights. A consistent, and broad application of the principle of national treatment has long been an important foreign policy goal of the United States. The NAFTA provision on national treatment is considered stronger and more straightforward than the Dunkel text of the proposed TRIPS Agreement. The unambiguous statement requiring "each Party [to] accord to nationals of the other Parties treatment no less favorable than that it accords to its own nationals" carries this goal forward. In only one area does NAFTA replace national treatment with reciprocity,26 and in comparison to numerous efforts in other international arenas to restrict national treatment in favor of reciprocity, this limited application of reciprocity appears justifiable. The Berne Protocol Since 1990, the World Intellectual Property organization has held meetings to discuss the appropriateness and form of a Protocol to the Berne Convention for the protection of Literary and Artistic works. For a variety of reasons, timely revision of the Berne Convention has not been feasible. The adoption of a Protocol open to all Berne Union members who wish to adhere has been seen by some as a way to ad 25 For example, Canada extended the exemption found in the Canadian Free Trade Agreement to continue its special protection of "cultural industries." In addition, the NAFTA Agreement provides a derogation from national treatment for the performer's right in secondary uses of Bound recordings. 26 Under paragraph 1 of Article 1703, performers' rights of secondary uses of sound recordings are restricted to a reciprocity treatment. Since the United States has consistently refused to recognize a performance right in sound recordings, the reluctance of Canada and Mexico to extend national treatment in this area appears understandable. dress the problems that the new technologies pose to the protection of literary and artistic works. Currently, there are ten subjects that are being considered for inclusion in such a Protocol.27 In September, 1992, the topic of national treatment was given added prominence as one of the subjects during an assembly meeting of Berne Union members. The suggestion to place more emphasis on national treatment was made by the delegation of the United States. In June of this year, a Committee of Experts will be convened in Geneva to discuss the Secretariat's proposed draft. Article 5(1) of the Paris text of the Berne Convention sets out the principle of national treatment: "Authors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union other than the country of origin, the rights which their respective laws do now or may hereafter grant to their nationals.... As discussed earlier, the Convention authorizes the substitution of reciprocity for national treatment in four specific cases: (1) works of applied art: Under Article 2(7), if the country of origin protects works of applied art solely under its industrial design law, a Berne country granting protection both under copyright and industrial design law may limit protection to its industrial design law; (2) back door provision: Under Article 6(1), works qualifying for protection under the back door (works of non-Berne Union members qualifying for protection by virtue of first, or simultaneous publication in the Berne Union country) may be limited to protection extended on a reciprocity basis; (3) comparison of terms: Under Article 7(8), if a country grants a term of duration longer than the minimum term specified in Berne Convention, and the country of origin grants a shorter term than the first mentioned country, the first mentioned country may apply the country of origin's shorter term; and (4) droit de suite: Under Article 14ter, countries having systems of droit de suite may limit participation in such systems to Berne members having similar systems of protection. Despite the seeming clarity of the Berne Convention obligation on the subject of national treatment, some Berne countries have adopted a number of strategies to avoid extending national treatment in certain areas. One strategy is characterizing a particular statutory program as not involving the "rights of authors" but instead concerning social security programs, tax policy, or national endowments. Another approach is effectively to limit the participation of foreign copyright holders in collecting societies. The World Intellectual Property Organization's draft on national treatment proposes recognition of a fifth exception to national treatment-the public lending right-but strict reaffirmation of national treatment in all other areas. Commentary to the draft proposal reasoned that in the area of public lending, a de facto agreement among member states had arisen that an exception to national treatment could reasonably be applied to the public lending right. The Secretariat reasoned explicit recognition of a public lending right exception would effectively confine the "cancers" of nonrecognition of national treatment. In all other areas, the commentary strongly argued that the principle of national treatment should be maintained. C. EUROPEAN COMMUNITY: NATIONAL TREATMENT VERSUS RECIPROCITY The EC has formulated new proposals or directives on rights that will be harmonized within the EC but for which reciprocity not national treatment will be the practice. The EC continues to take a very narrow view of Berne's national treatment obligations and to show an alarming tendency to condition eligibility for new rights on_reciprocity. In the area of intellectual property, the EC bureaucracy has been very active. The Commission of European Communities recently estimated that between 3 to 5% of the Community's gross domestic product related to copyright and neighboring rights.28 Since members of the European community are creating a single integrated market, the harmonization of intellectual property law is considered by most Europeans to be essential. 27 The ten items are: (1) computer programs; (2) data bases; (3) rental rights; (4) non-voluntary licenses for the making of sound recordings of musical works; (5) non-voluntary licenses for primary broadcasting and satellite communication; (6) distribution right, including importation right; (7) duration; (8) communication to the public by satellite broadcasting; (9) enforcement of rights; and (10) national treatment. 28 Commission of the European Communities, Copyright and Neighboring rights in the European Commission (European file 9/1991). Initiatives by the EC regarding copyright and neighboring rights are numerous and complex. A general policy overview is provided by a 1988 Green paper,29 and a 1991 Follow-up to the Green Paper.30 Specific initiatives include directives and proposals governing the term of protection; rental and lending rights; computer programs; data bases; industrial designs; semiconductor chips; neighboring rights and the Rome Convention; and satellite broadcasting and cable retransmission. Some of these initiatives raise serious national treatment concerns, while in others the issue is less clear. In the Follow-up to the Green Paper, which broadly discussed copyright issues, the Commission of European Communities expressed an uneasiness over the principle of national treatment.31 While not expressly disavowing national treatment, the Commission endorsed the achievement of "a minimum level of substantive and effective protection at world level." While unmentioned, the use of reciprocity as an electric cattle prod to help uplift the world's level of protection appears an important part of the Commission's thinking. In adopting this strategy, the EC is apparently applying the tactics of trade negotiations in lieu of the 100-year Berne tactic of using national treatment to increase levels of protection incrementally. Historically in copyright, reciprocal arrangements have tended to achieve lower levels of protection than national treatment based arrangements. 1. Duration of copyright. The Proposal for a Council Directive harmonizing the term of protection of copyright and certain related rights explicitly substitutes reciprocity for national treatment as permitted by Article 7(8) of the Paris text of the Berne Convention. Proposing to establish a uniform term of life of the author plus 70 years for literary and artistic works, Article 4, paragraph 3 endorsed reciprocity for countries outside the EC in the following words: The terms of protection laid down in Article 2 shall also apply in the case of rightsholders who are not Community nationals, provided Member States grant them protection. However, the term of protection granted by Member States shall expire no later than the date of expiry of the protection granted in the country of which the rightholder is a national.32 In the commentary preceding the proposed Directive, the Commission apparently felt the choice between national treatment and reciprocity easily favored reciprocity: Preference must go to the principle of the comparison of protection. It is only natural that "foreign works" and third country nationals should not be protected for a period longer than is considered appropriate by their own country. Moreover, since Community works and nationals are not protected for as long a period in those countries as they are in the Community, comparing terms of protection is a way of ensuring reciprocity. It was stated in the Commission's working program on copyright and certain related rights-Follow-up to the Green Paper-that one of the primary objectives is to ensure that the level of protection is as high as possible in the European Community and in third countries. If third countries are to be induced to increase the term of protection, the EC concludes that it should avoid granting them the greater Community term unilaterally. The 29 Green Paper on Copyright and The Challenge of Technology-COM (88) 172 final; (June 7, 1988). 30 Follow-up to the Green Paper, Working program of the Commission in the field of copyright and neighboring rights-COM (90) 584 final; (January 17, 1991). 31 In the portion of the paper discussing national treatment, the following statements were made: "Next, a response to the challenges of new technology which is limited to the Member States of the Community will deal with only part of the problem. If protection is inadequate outside the borders of the Community creative work produced in the Community can be plagiarized in nonmember countries, and productive activity displaced to countries in which the level of protection of intellectual property is lower. As we move towards an intensification of world trade the Community would find itself having to deal with growing imports of work produced in breach of copyright in those countries. "Neither can we underestimate the fact that the rule of national treatment laid down in the international copyright conventions means that any improved protection available in the Member States of the Community has to be granted to natural or legal persons from non-member countries, even though in those countries natural or legal persons from the Community may receive a lower level of protection. The existing imbalances would be aggravated." 32 Commission of the European Communities, Proposal for a Council Directive harmonizing the term of protection of copyright and certain related rights, COM(92) 33 final (March 23, introduction of a comparison system, it is asserted, will act as an incentive to third countries to prolong their term of protection.33 2. Rental and Lending Rights. 34 The Council Directive on rental and lending rights has also raised national treatment concerns, particularly with the U.S. motion picture industry. The United States extends commercial rental rights to sound recordings and computer programs, while denying such protection to motion pictures.35 Several EC members extend rental rights to sound recordings, computer programs, and motion pictures, and the harmonizing directive requires all EC members to extend rental rights to these works. The rental directive is complex because it proposes to regulate the legal relationships between performers, authors (including principal director), and motion picture producers. While the directive provides that performers' and authors' rights are assignable, Article 4 establishes an unwaivable right to equitable remuneration, and authorizes Member States to establish and regulate "collecting societies" to ensure that equitable remuneration is imposed. The U.S. motion picture industry believes the discretion accorded Member States in setting up remuneration schemes will effectively deny U.S. filmmakers national treatment in many areas. There is also a fear that some Member States may choose to regard rental of motion pictures as a "neighboring right" which is uncollectible by nationals of states not members of the Rome Convention of 1961. The Rome Convention was designed to protect three categories of rights owners: performers, broadcasting organizations, and producers of sound recordings. The rights of copyright holders in motion pictures are firmly established within the Berne Convention, and there would appear to be no justification for subjecting rental of motion pictures to a neighboring rights regime. 3. Databases. The protection of databases within the EC also raises issues with national treatment dimensions. The European Commission's Proposal on the Protection of Databases 36 would require Member States to give copyright protection to databases that qualify as collections within the meaning of Article 2(5) of the Berne Convention. In addition, the proposed directive endorses the creation of a new right of "unfair extraction" which would apply for a 10 year term. In practice, it appears the unfair extraction right would commonly be applied to purely factual databases that are unable to qualify for copyright protection on the basis of selection or arrangement. While it is clear that databases qualifying for copyright protection under the Berne Convention would be subject to national treatment, early drafts proposed the application of reciprocity to the unfair extraction right. 4. Private Copying. Lastly, the anticipated EC directive on private copying is viewed with considerable trepidation by the motion picture and sound recording industries. This directive basically concerns compensation schemes using levies on copying equipment and blank media to compensate performers, authors, and producers of motion pictures and sound recordings. While the draft directive was recently tabled by the EC, unofficial drafts of the proposed directive extended rights to foreign nationals on the basis of reciprocity. III. ISSUES INVOLVING NATIONAL TREATMENT THAT ARE NOT FULLY RESOLVED IN THE INTERNATIONAL CONVENTIONS A. CONFLICTS OR CHOICE OF LAW In its simplest terms the question is: "If Jane Q. Citizen, who creates a work in one country, tries to protect that work in a second country, which law will be applied, that of the country of origin of the work or the country where protection is sought?" 33 Id. at 30-31. 34 The Council of the European Communities, Council Directive 92/100/EEE of November 19, 1992. 35 Philosophy, the United States Congress has justified rental rights for sound recordings and computer programs on the grounds that commercial rental is frequently a means for promoting unauthorized reproduction of sound recordings and computer programs. Motion picture producers, on the other hand, have not been able to demonstrate to the satisfaction of Congress that commercial rental fosters unauthorized reproduction of motion pictures. 36 Directive 91/250/EEC, OJ L122/42 (May 17, 1991). In Art. 5.2 the Berne Convention provides "[T]he extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed."37 Both of the international copyright conventions provide for national treatment and each guarantees that an author shall receive the same protection a state accords to its own nationals. How national treatment relates to the choice of law in cases involving more than one country has been the subject of debate in recent years. There are a number of ambiguities in these provisions that have not yet been fully resolved.38 These ambiguities are reflected in the development of several alternate theories as to how the conflicts questions should be resolved 39 and also in a number of challenging court battles.40 As Professor Ulmer notes all of the major international copyright conventions are based on the principle of national treatment. This provides support for the theory that the acquisition, scope and termination of rights should be determined by the law of the protecting country.41 Another theory espoused is that intellectual property rights should be linked with the legal system of one specific country, the country of origination. This specific territorial link is necessary in the interest of the certainty of legal transactions.4 42 As one commentator noted in 1985: Considerable academic debate has already taken place, especially on the Continent about the most appropriate law to govern the creation and assignment of copyright. The conflict is most often between the law of the country of origin, the law of the protecting country (that is, the law where the copyright protection is claimed) and the law of the contract. The international conventions put emphasis on the law of the protecting country and Ulmer has recommended that this should determine rules about the creation, termination and scope of copyright, while the law of the contract should decide disputes between employer/employee, assignor/assignee and licensor/licensee. This will lead to uniformity of treatment where a single agreement purports to transfer rights in a number of different countries. Whatever the solution adopted, it is obviously important to achieve as far as possible international agreement so that the same result will be reached whatever the forum selected.43 The question posed at the beginning of this section becomes more complicated as additional parties, rights, or countries are added to the equation. Meanwhile the courts continue to grapple with whether to apply the law of the country where the work originates or the law of the country where protection is sought or some variant thereof. One of the more interesting recent cases involving a full range of these ambiguities concerned a colorized version of a black and white motion picture, "Asphalt Jungle." The argument that colorizing motion pictures distorted or altered the integrity of a work had already been brought and lost in the United States. In the United States the company that produces a motion picture is usually considered the author, and a film is not subject to the same kind of moral rights protection available on the Continent. Following colorization of "Asphalt Jungle," the owner Turner Entertainment licensed the film for broadcast on French television. At this point, the heirs of John Huston, the director, and a co-scriptwriter brought an action in France against the French television station to enjoin the broadcast. Ultimately a number of groups joined with the parties protesting distribution of the colorized film and Turner joined the action as the owner of the film. Plaintiffs, the parties associated with the Huston heirs, argued that the benefit of a moral right under French law should be given to the physical person who contributed to the creation of the work whether or not this was done on the basis of the applicable copyright conventions; that the United States had just adhered to the Berne Convention and that plaintiffs' claim to authorship was founded on Article 14bis (2) of 37 See also Universal copyright Convention as revised at Paris, 1971, Art. II. 38 See generally, E. Ulmer, "Intellectual Property Rights and the Conflict of Laws" (1978) (Study prepared for the Commission of the European Communities). 3 See id. at 6-9, 28-52 for a discussion of how these theories originated, and how they are applied. 40 See, e.g., J. Ginsburg; Colors in Conflicts: Moral Rights and the Foreign Exploitation of Colorized U.S. Motion Pictures; 81 Journal of the Copyright Society of the U.S.A (1991), A. Bertrand, Affaire, John Huston: La Cour De Cassation Opte pour "la loi de la jungle," 38 Cahieres du Droit D. Auteur Mai, Juin 1991. Translated by M. Dadant. 41 Ulmer supra at 8, 9. 42 Ulmer supra at 7, 8. 43 D.M. Kloss, Copyrights and the Conflict of Laws, 1 EIPR 15 (1985). |