Hughes, Hon. William J., a Representative in Congress from the State of New Jersey, and chairman, Subcommittee on Intellectual Property and Comer, Douglas B., Deputy Assistant Secretary and Deputy Commissioner of Patents and Trademarks, U.S. Department of Commerce Hart, Leslie James, counsel, Harris Corp. Semiconductor Sector, on behalf of the Semiconductor Industry Association Oman, Ralph, Register of Copyrights and Associate Librarian for Copyright Schwartz, Robert S., McDermott, Will & Emery, on behalf of the Electronic Industries Association of Japan Stern, Richard H., Esq., intellectual property lawyer, Washington, DC LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING Comer, Douglas B., Deputy Assistant Secretary and Deputy Commissioner Submission of "Report on the Operation of Section 914 of the Semiconduc- tor Chip Protection Act of 1984," submitted by the Assistant Secretary and Commissioner of Patents and Trademarks, dated July 1, 1990 Hart, Leslie James, counsel, Harris Corp. Semiconductor Sector, on behalf of the Semiconductor Industry Association: Prepared statement Oman, Ralph, Register of Copyrights and Associate Librarian for Copyright Services, Library of Congress: Prepared statement Schwartz, Robert S., McDermott, Will & Emery, on behalf of the Electronic Industries Association of Japan: Prepared statement Stern, Richard H., Esq., intellectual property lawyer, Washington, DC: Letter from Wendell L. Willkie II, General Counsel of the U.S. 132 Letter from Daryl Hatano, director, International Trade & Government Letter from Harry F. Manbeck, Jr., to Hon. William J. Hughes, dated Appendix 2.-Further legislative material H.R. 1998, 102d Cong., 1st sess., (1991) (Union Calendar No. 80) H. Rept. No. 102-122 accompanying H.R. 1998 (Committee on the S. 909, 102d Cong. 1st sess. (1991) (Calendar No. 113) S. Rept. No. 102-78, (Committee on the Judiciary) P.L. No. 102-64, 102 Stat. 320 Page 138 144 152 152 155 158 167 177 SEMICONDUCTOR INTERNATIONAL PROTECTION EXTENSION ACT OF 1991 WEDNESDAY, MAY 1, 1991 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INTELLECTUAL PROPERTY AND JUDICIAL ADMINISTRATION, COMMITTEE ON THE JUDICIARY, Washington, DC. The subcommittee met, pursuant to notice, at 10:06 a.m., in room 2237, Rayburn House Office Building, Hon. William J. Hughes (chairman of the subcommittee) presiding. Present: Representatives William J. Hughes, Patricia Schroeder, Barney Frank, George E. Sangmeister, Carlos J. Moorhead, Hamilton Fish, Jr., F. James Sensenbrenner, Jr., and Craig T. James. Also present: Hayden W. Gregory, counsel; Michael J. Remington, assistant counsel; Veronica L. Eligan, staff assistant; Thomas E. Mooney and Joseph V. Wolfe, minority counsel; and James T. Quirk, intern. OPENING STATEMENT OF CHAIRMAN HUGHES Mr. HUGHES. The Subcommittee on Intellectual Property and Judicial Administration will come to order. Good morning. This morning the subcommittee is conducting a legislative hearing on two legislative proposals to extend an experimental law aimed at developing worldwide protection for semiconductor chip designs. With its hundreds of thousands of intricately etched and integrated circuits, the chip represents a new and very important kind of intellectual property, a type of property of critical importance to our country. Six and a half years ago, Congress enacted the Semiconductor Chip Protection Act of 1984. The Chip Act, as it has come to be known, was_crafted over a preceding 6-year period by the subcommittee. Former subcommittee chairman Bob Kastenmeier authored the final version of the bill. Congressmen Don Edwards and Norm Mineta were the chief sponsors. The ranking minority member of the subcommittee, Carlos Moorhead, played a very key role, as did Senators Leahy and Mathias in the other body. The 1984 act was tailored to meet the unique needs of both the semiconductor industry and the public. It drew on the richness of both our copyright and patent laws. The act conferred 10 years of protection on the mask works used to design semiconductor chips. Further, the 1984 act was rooted in the proposition that the semiconductor industry was increasingly international. By enacting sui (1) generis or freestanding legislation, the United States was charting a new path, as the act did not fall under any treaty or agreement providing international protection. The act, therefore, provided international transitional provisions intended to encourage the rapid development of a new worldwide regime for the protection of semiconductor chips. These interim provisions, initially set to last for 3 years, were extended by the Congress in 1987. They are now scheduled to sunset on July 1, 1991. The carrot and stick approach-codified in section 914 of the act-authorizes the Secretary of Commerce, who acts through the Commissioner of Patents and Trademarks, to issue orders that make foreign nationals, domiciliaries and sovereign authorities eligible to obtain semiconductor chip protection in the United States if statutory criteria are met. In my opinion, the Secretary has done a good job. Congress gave him a good law to administer. During its short 61⁄2 years of life, section 914 has been responsible for the development of bilateral relations between the United States and 19 foreign countries in regard to protection of mask works. Most of these countries have enacted laws similar to our own. The ultimate goal of the 1984 act was to move from bilateralism to multilateralism, a much preferred and more advantageous form of protection for not only the United States but the world community as well. Multilateralism, acceptable to our country, has not yet occurred despite the best efforts of the World Intellectual Property Organization and the General Agreement on Tariffs and Trade. So, in the foreseeable future, the United States will have to continue to rely on bilateralism, as contemplated by section 914. In order to do so, extension legislation is necessary. Two bills are pending before the subcommittee: H.R. 1998, which extends section 914 for a 4-year period and requires the Secretary of Commerce to file another report with the Congress, and H.R. 1999, which extends section 914 indefinitely and does not contemplate a report. Without objection, the bills will be reprinted in the hearing record. [The bills, H.R. 1998 and H.R. 1999, follow:] 102D CONGRESS 1ST SESSION H. R. 1998 To amend chapter 9 of title 17, United States Code, regarding protection extended to semiconductor chip products of foreign entities. I IN THE HOUSE OF REPRESENTATIVES APRIL 23, 1991 Mr. HUGHES (for himself, Mr. MOORHEAD, Mr. EDWARDS of California, Mr. FRANK of Massachusetts, Mr. KOPETSKI, and Mr. MINETA) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend chapter 9 of title 17, United States Code, regarding protection extended to semiconductor chip products of foreign entities. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE. 4 This Act may be cited as the "Semiconductor Inter 5 national Protection Extension Act of 1991". 6 SEC. 2. FINDINGS AND PURPOSES. (a) FINDINGS.—The Congress finds that (1) section 914 of title 17, United States Code, 7 8 9 which authorizes the Secretary of Commerce to issue |