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this Committee express its concern for the injury to American authors and publishers which will accompany ratification and recommend the adoption of appropriate remedial legislation, as was done in the case of the Trade Expansion Act, in the event the treaty is ratified.
LINDEN AND DEUTSCH,
New York, N.Y.
UNIVERSAL COPYRIGHT REVISION TO BE SUBMITTED TO CONGRESS FOR RATIFICA
TION, BY ITS TERMS THE PROPOSED TREATY CALLS FOR PRIOR APPROVAL OF EXPROPRIATION OF WORKS CREATED BY UNITED STATES CITIZENS
A statement opposing ratification and alternatively, a proposal to mitigate the economic losses of American Authors and Publishers in the event of ratification of Paris text of U.C.C.
In July 1971 diplomatic conferences held at Paris proposed revisions to the Universal and Berne Copyright Conventions. These revisions were principally designed to reduce the costs to developing countries of using intellectual property created by authors and publishers in the developed countries. The Paris text of the Universal Copyright Convention will be submitted shortly to the United States Senate. Ratification of this treaty by the Senate would reduce the protection available to American authors and publishers under both the Berne and Universal Conventions, and would constitute formal approval by the Senate of the expropriation of the private property of Amercian citizens without adequate compensation.
Despite the legitimate needs of underdeveloped countries for machinery, equipment and food, none of these goods and products are given to foreign countries by the United States simply by consenting in a treaty to the taking of these items without payment to the American owners of the property. It is not conceivable that intellectual property created and produced by American citizens would be treated by the Congress of the United States as less valuable. We urge therefore that the Senate not approve the Paris revision of the Universal Copyright Convention.
If, however, the Senate feels that the national interest of the United States in promoting the welfare of the developing countries requires ratification, the Federal Government should provide compensation to the authors and publishers adversely affected by such revision, following the precedent established in the Trade Expansion Act of 1962 and other legislation. After discussing the relevant provisions of the Paris Revisions, there is set forth the pertinent features and legislative history of the Trade Expansion Act.
1. SUMMARY OF THE MAJOR EFFECTS OF THE PARIS REVISIONS ON THE RIGHTS OF
AUTHORS AND PUBLISHERS (IN PARTICULAR OF EDUCATIONAL MATERIALS)
The Universal and Berne Copyright Conventions are the two treaties which provide international protection for the rights of authors, publishers and other copyright owners, in their books and other writings, their audio-visual works, and their other intellectual property in all media. The United States is a member of only the Universal Copyright Convention, and therefore only the revision of that treaty is formally before the Senate. However, American ratification of that revision will also render effective the Paris revisions of the Berne Convention.
Publishing and other means of dissemination of intellectual property are of multi-national scope today, and it is common for works to be published simultaneously in the United States and abroad. American authors and other creators of intellectual works thereby obtain the protection of the Berne Convention. Recognizing this fact, the Paris revision of the Berne Convention provides that it will not go into effect unless and until the United States, the United Kingdom, France and Spain ratify the Paris revision of the Universal Copyright Convention.
This provision also explains why the Paris sessions which produced the revi. sions of both treaties were conducted concurrently and the substantive provisions
1 A more detailed statement of the provisions of the Paris revisions is attached as Annex A, together iwth columar comparisons with the existing Berne Conventions and the Stockholm Protocol.
of the revisions of both texts are almost identical, insofar as they concern developing countries. Thus, the United States' decision upon ratification of the Paris revision of the Universal Copyright Convention is inextricably intertwined with the same revision of the Berne Convention, and the effects on both treaties must be considered together.
The foreign market and the involvement therein of American educational publishers has increased markedly during the last decade and there is every evidence that the American publishing industry is not only exporting more works but is investing in foreign publishing. While the concessions of the Paris revision run in favor only of "developing countries”, that term is so undefined as to allow over 80 countries, including some in Europe, to qualify. Virtually every country outside North America and Europe, save only Australia, New Zealand, and Japan, could be considered "developing".
The concessions granted to the “developing countries” primarily deal with the rights to translate and reproduce for educational purposes. But the scope of such purposes, as is shown below, is so broad that far more than textbooks, reference works and the usual instructional audio-visual materials may be covered; the term may be deemed to include, in practice, virtually any work so long as its use is in any way related to any form of instruction, scholarship, or research. For the authors and publishers of educational materials, the “educational" exemptions eliminate over 80 countries from their market. A. The Compulsory Translation and Reproduction Licenses
The most important provisions of the Paris revisions allow developing countries to grant licenses without permission of the copyright owners for the translation and reproduction of works within a short time after their publication. The revisions state that the copyright owners shall be paid a "just compensation consistent with standards of royalties normally operating on licenses freely negotiated between persons in the two countries concerned," but this is likely to prove an empty formula.
Under the terms of the Paris revisions, and by the very nature of such licenses, they are likely to be granted only after the copyright owners have already rejected as inadequate the royalties and other licensing terms proposed by the users in the developing country; the new terms are likely to be even more exiguous. Furthermore, by the very nature of the class of developing countries, there will likely not be sufficient bilateral relations to establish royalty standards with any definiteness, and particularly not for the newer forms of educational materials, especially audio-visual works. The "consistency" to be expected under the Paris standard will therefore be far below the reasonable minimal expectations of authors and publishers. Moreover, the standard will be policed only by the national tribunals of the respective developing countries. In sum, adequacy of compensation appears to be left, in actuality, to the developing country's own judgment as to what amount is “just”.
The compulsory translation license applies to translations into any language "in general use" in a developing country. It may be granted within a short period after first publication of the original work, if a translation into the national language has not been published or is out of print. For translations into a language not in general use in any developed country which is a member of the particular Convention, the period is one year. If the language is in general use in such a developed country, the relevant period is three years; but for languages other than English, French and Spanish, the period can be reduced by agreement with the developed country where the language is in general use (e.g., Brazil and Portugal agreeing to reduce the period for Portuguese one year). Under the existing Berne Conventions, any country may reserve the right to make translations into its national languages without compensation, but only beginning ten years after publication and only if no such translation has been published in any member of the Convention. Under the existing Universal Copyright Convention, a member country can grant compulsory licenses for translation into its national langnages beginning seven years after publication of the original work, if the work has not been translated into such languages or if the translations are out of print.
The compulsory reproduction license of the Paris revisions becomes available a stated number of years after the first publication of a work, as described below, if copies have not been distributed or have not been on sale for six months in the licensing State "at a price reasonably related to that normally charged in that State for comparable works.” Where the publication of such works is subsidized in any way by a developing State, it will, of course, be impossible for American publishers to make copies of their own works available at such prices. The stated periods are three years for works of science, mathematics and technology; seven years for works of fiction, poetry, drama and music; and five years for other works.
It has frequently been asserted that compulsory licensing under the Paris revisions will be the exception rather than the rule. The hard fight waged by the developing countries to obtain the compulsory licensing system, however, indicates that they themselves expect to make substantial use of the system. The effect will be both to deprive American authors of compensation and to exclude American publishers from serving developing countries by any means, including direct sales or by foreign publishing affiliates. B. The Vague Definition of "Developing Countries"
The Paris revisions, as we have noted above, contain no objective criteria of what constitutes a “developing country”, nor are there any viable standards relating the class of countries entitled to invoke the special concessions to the ends sought to be served by the concessions. A developing country is defined simply as one which is “regarded as a developing country in conformity with the established practice" of the General Assembly of the United Nations. Although the reference to the "established practice” of the United Nations may be considered to mandate some reference to its practice in the selection of countries entitled to reduced levels of contributions to U.N. upkeep (based principally on per capita income statistics) or in granting economic assistance, it is generally understood that these "standards” fluctuate widely and may turn upon factorspolitical, historical or even economic-having little relevance to the legitimate need of any country for the reservations established by the Paris revisions. There is no central arbiter nor list of "developing countries' and, in the final analysis, it seems clear that each country adhering to the revised Convention is able to determine for itself whether it may invoke the compulsory licensing provisions. It is clear, further, that a great many countries in South and Central America, Asia, Africa, the Middle East and even parts of Europe will be able to claim the benefits of these provisions with sufficient credibility under the Convention standard to avoid the appearance of an outright rejection of its Convention obligations.
It is not without significance that those countries seeking special concessions at the Paris conferences steadfastly refused to admit any objective criteria of the status of a country's development for the purposes of the revisions, and that the opinion of the General Rapporteur of the U.C.C. "Concerning the Criteria Governing Developing Countries'" is contained in a document which states the opinion to be "purely personal ... [and] although ... based in part on the discussion of the question during the Paris Conference. [one which] cannot in any way be regarded as reflecting the views of other delegates or as constituting a part of the General Report of the Conference."
The inadequacy of the definition of a “developing country” as expressed in the Paris revisions is apparent not only at the stage at which a country may invoke the special reservations on the rights of translation or reproduction, but also at the stage at which it may no longer do so—i.e., when it "ceases to be regarded" as a dereloping country. The inadequacy of the notion of a "developing country" in the Paris revisions not only allows an enormous number of countries at various stages of development to grant compulsory licenses, but also allows them to con1inue doing so as their states of development improve, virtually without limit. The only cutoff point stated in the Paris revisions is the point at which a country “ceases to be regarded" as a developing country, a phrase for which there are no more objective criteria than there are for the definition of "developing countries" discussed above. Thus, any country initially taking the benefit of the compulsory licenses may well continue to grant such licenses after having achieved a stage of development sufficient to enable it to deal with the property of others on a level expected of other Convention countries. C. The “Educational” Limitation
The compulsory license provisions available to developing countries under the Paris revisions are, as has been repeatedly pointed out by proponents of ratifica. tion, circumscribed by reference to "educational" limitations on the scope of the license. Thus, compulsory translation licenses may only be granted for the purposes of “teaching, scholarship or research”, while compulsory reproduction
licenses (and translation licenses for non-broadcast use of audio-visual text) are limited to use in connection with "systematic instructional activities". In some cases, such limitations serve also to describe the class of works subject to compulsory licensing—thus, only audio-visual works "prepared and published for the sole purpose of being used in connection with systematic instructional activities" are subject to such licenses. In a similar vein, both broadcasts utilizing compulsory licensed translations and the permitted export of such translations under certain conditions are to be devoid of commercial purpose.
For authors and publishers of educational materials, since it is addressed to eliminate their entire market, such limitations obviously provide no comfort, and their significance is a negative one. They only serve to underscore a basic point of these comments—that a particular segment of American enterprise is being asked (required might be a better word) to devote the product of its private initiative to the subsidization of the development of foreign countries in a manner thoroughly inconsistent with our traditional concepts of property and of individual vs. governmental responsibility.
Assuming that some American authors and publishers do find initial comfort in the educational limitations on compulsory licensing under the Paris text, either as a device for inexulating them from the effect of such licensing or as a theoretically satisfactory justification for the need for such reservation, they would do well to consider how little actual limitation these standards impose. The Report of the General Rapporteur for the Paris U.C.C. Conference notes the “understanding" that "scholarship" encompasses not only instruction at grade and high schools, colleges and universities, but also a "wide range of organized educational activities intended for participation at any age level and devoted to the study of any subject" and that "systematic instructional activities" include "not only activities connected with the formal and informal curriculum of an educational institution, but also systematic out-of-school education." The Report also notes that the possibility of the general public sale of copies produced under compulsory licensing was "envisaged" at the Conference. The only palliative offered for this possibility is that the licensing authority of the State would be "under a duty to determine that the License would fulfil the need of specified 'systematic instructional activities' [and the license) would necessarily be refused if such activities were in fact incidental to the actual purpose of the reproduction.” Observers at the Paris Conference were left with but little doubt that, as we have indicated above, the countries seeking the benefit of these reservations have a rather fluid and wide-ranging conception of "scholarship", "education", and the other "limitative" criteria. D. Reproduction under Compulsory Licenses outside the Developing Countries
The Paris revisions provide that compulsory licenses are “valid only for publication” in the territory of the licensing State, but the discussion at the Paris conference made abundantly clear, as confirmed by governing interpretations in the Report of the General Rapporteurs, that works may be printed outside a developing country pursuant to its compulsory license, and joint translation facilities may be employed by several countries under their compulsory licenses. This interpretation imposes only the following restrictions of substance on foreign reproduction of compulsory licensed works:
1. The reproduction facilities in the developing country are "incapable for economic or practical reasons" of reproducing the copies (a standard to be interpreted by the developing country itself);
2. The country of reproduction is a Berne or U.C.C. member;
3. All copies reproduced abroad are delivered to the licensee in bulk for distribution only in the developing country;
4. The reproduction facility is not "specially created" for reproduction under compulsory licenses. The interpretation also provides that compulsory licensees may employ translators and editorial personnel in other countries, and that several compulsory licensees from different countries may use the same translation; and
5. The reproducing facility guarantees that the work of reproduction is law. ful in its own country.
To illustrate the result-half a dozen or more developing countries may utilize the same editorial, translation and printing facilities, located in any Berne or U.C.C. country, to translate and/or reproduce a work to be used pursuant to the
compulsory license provisions of each country. These joint printing facilities need not even be in a developing country. Given the additional right of a joint translation, this in fact results in a publishing enterprise servicing a group of developing countries.
There is furthermore no requirement that these foreign translation, editorial, and printing operations must not be conducted for profit. In other words these may well be profit-making publishing enterprises. The compulsory licenses will save them most of the initial costs and royalty expenses, which are among the heaviest expenses of any publishing enterprise. The net result will be to sanction profit-making publishing operations which will preempt markets from the authors and publishers for copyrighted materials.
The foregoing is a brief summary of the provisions of most interest to educa. tional authors and publishers. Attached as Annex A is a chart that summarizes in parallel columns the major substantive provisions dealing with translation, reproduction and other rights under the existing Berne Convention and the Stockholm Protocol and the Paris revision of that Convention.
Since the concessions to developing countries under the Paris revisions of the Universal and Berne Conventions are substantially the same, a general summary of the concessions made by the Paris revision of the Universal Convention is reflected in the columnar presentation of the Paris revisions to the Berne Conventions. Such significant differences as exist are set forth in footnotes to the chart.
The view has been expressed that the Paris revision of the Berne Convention is a substantial improvement over the Stockholm Protocol to that Convention. The Stockholm Protocol, which only five years ago created such a furor, has not been adopted by the developed countries, because of its broad preemption of the rights of authors and publishers. For authors and publishers of educational materials, however, broad or narrow that category inay be, examination of the chart attached an Annex A will show that the Paris revision can hardly be deemed a meaningful improvement for them over the Stockholm Protocol. The changes in the compulsory license scheme have been largely procedural, and promise no substantive relief of any importance. Regardless of the more cir. cuitous formalities, required, the result for educational authors and publishers would be the same expropriation.
2. THE PROPRIETY OF AND PRECEDENT FOR GOVERNMENTAL COMPENSATION IF THE
PARIS REVISION IS RATIFIED
For the reasons above, we urge that the Paris Revision of the Universal Copyright Convention should not be ratified. However, if the Senate deems that the underlying national interests of the United States require such ratification, notwithstanding the injury to some of its citizens, we suggest that provision be made for governmental compensation to those authors and publishers whose interests would be sacrificed.
United States economic assistance to developing countries has always heretofore been a governmental responsibility, discharged by money payments or loans to developing countries or by governmental purchases of needed materials which were then supplied directly to the foreign countries. If in this case the United States Government feels it cannot take that course with respect to intellectual property, and that economic assistance with respect to such property must become an individual responsibility of a class of American citizens, then governmental action to compensate American authors and publishers for this burden is appropriate. The Senate, and the United States Government in general, has a history of carefully guarding the rights of United States citizens where the national interest requires that some private interests of some citizens be sacrificed in order to make concessions to foreign countries. The outstanding example is the adjustment assistance provisions of the Trade Expansion Act of 1962.
The Trade Expansion Act liberalized United States tariff provisions so as to make possible what later became known as the Kennedy Round of tariff reductions. When the Act was proposed and enacted, it was recognized by all concerned that some firms and workers would be seriously injured by the increase in imports which the contemplated tariff reductions would allow. Accordingly, the Act included provisions under which injured firms could receive assistance consisting of technical assistance, government loan guarantees, and tax assistance, and affected workers could receive assistance consisting of a form of unemployment compensation, training for other jobs, and relocation allowances.