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“musical, dramatic and cinematographic works, and paintings, engravings and sculpture. However, licenses to translate works composed mainly of illustrations may also authorize the reproduction of the illustrations, subject to the conditions of V quater. The Conference agreed that the lyrics of songs were not subject to the translation license.

Article V ter also allows developing countries to license broadcasting organizations to translate published works for use in non-commercial broadcasts intended for teaching or disseminating the results of research, or in recordings used for such broadcasts; the license may also cover texts of audio-visual works which were prepared for use in systematic instructional activities.

Developing countries which grant compulsory licenses are protected from retaliation. Thus no developed country can reduce the level of protection which it is obliged to give to works from such developing countries.

CONDITIONS OF COMPULSORY LICENSES Articles V ter and V quater impose substantially similar conditions for the granting of compulsory translation and reproduction licenses. The applicant for the license must have requested and been denied authorization by the owner of the particular right, and must inform a designated information center of his request. If the owner cannot be found, copies of the license application must be sent to the publisher and a designated information center. A translation license cannot be granted until a further six months (for 3-year licenses) or nine months (for 1-year licenses) after the applicant requests a license from the owner or sends his application to the publisher. No license can be granted if an authorized translation is published during this period. There is a similar six-month grace period for reproduction licenses, but it is concurrent. The grace period for translation begins after expiration of the one- or three-year period.

Translation and reproduction licenses are not transferable; do "not extend to the export of copies," and are "valid only for publication in the territory" of the licensing country. Copies must bear a notice that they are for distribution only in the licensing state, the UCC copyright notice where required, the title, and the author's name. Translations must be "correct," reproductions must be "accurate."

Due provision must be made "at the national level” to insure that licenses provide “just compensation" consistent with normal royalty standards for “freely negotiated" licenses between persons of the two countries, and payment and transmittal. However, if currency regulations interfere (implying they may), "all efforts” should be made to insure transmittal in international convertible currency “or its equivalent.”


A compulsory translation license under 1 ter is terminated if a translation is published in the developing country by the owner (or with his authorization) with substantially the same content as the edition for which the license was granted, at a price reasonably related to that normally charged in the country for comparable works. A compulsory reproduction license is also terminated by distribution of authorized copies of the edition in the country, at "reasonably related” prices, to the general public or in connection with systematic instructional activities. In either case any copies made before the license is terminated can continue to be distributed. Translation and reproduction licenses cannot be granted when the author has withdrawn all copies from circulation.

These provisions were essentially the provisions of V ter and V quater, as set forth in the draft texts submitted to the UCC and Berne revision conferencesthe "package deal.” However, the “package" was opened and its contents considerably changed by adding further provisions to the text and by adopting "interpretations" which could influence the application of the license provisions as effectively as formal amendments. These some of the changes.

(1) The right of translation was extended to include broadcasting.

(2) While compulsory licenses to translate into languages in general use in developing countries were only to be granted three years after publication. V ter was amended at the conferences to permit a developing country to grant such licenses after one year if all developed countries using the language agree. Thus, Brazil, by agreement with Portugal, will be free to translate American novels and other works into Portuguese, Brazil's national language, one year (plus nine months) after publication in the United States. The three-year limit cannot be reduced for compulsory license translations into English, French, or Spanish. HOW BROAD IS "SCHOLARSHIPS" ?

(3) The one and three-year compulsory translation licenses were supposed to be used, according to V ter, "only for the purpose of teaching, scholarship or research.” However, the Report of the UCC conference states that "scholarship" refers not only to instructional activities in schools and colleges "but also to a wide range of organized educational activities intended for participation at any age level and devoted to the study of any subject." Delegates from developing countries made it clear that they inderstood the area of use to be extremely broad, and that it included the sale of copies to the public. Similarly, the compulsory reproduction license, according to V quater, was supposed to be used for the publication of editions "for use in connection with systematic instructional activities." However, the Report states that “this term is intended to include not only activities in connection with the formal and informal curriculum of an educational institution, but also systematic out-of-school education.” And some delegates again indicated their view that sale of copies to the public was permitted. Discussion at the conference reflected broad, loose interpretation of educational and instructional activities that could easily encompass the translation or reproduction—and general sale-of novels and other trade books on optional reading lists of schools, adult education centers, radio or television lecture series, correspondence courses, and the like. Some delegates indicated their belief that any use that promoted "culture" served an educational purpose.

(4) A basic premise of the “package deal” was that copies produced under compulsory licenses could not be expected; and licenses were to be "valid only for publication in the territory” of the developing country which grants the license. However, the developing countries succeeded in amending V ter to allow a licensing country to export copies of translations produced under compulsory license, in any language except French, English or Spanish, to its nationals in other countries, for “teaching, scholarship or research."

(5) A fundamental question is whether the holder of a compulsory license can have the copies printed in another country. If a developing South American, African or Asian country grants one of its nationals a license to translate or reproduce an American biography, novel of textbook, may he have the edition printed in Taiwan, or East Germany, or Czechoslovakia ? May he hire a translator in another country? And may nationals of several countries, all granted compulsory licenses for the same American work, use the same translator and have their copies produced abroad by the same printer? Developing countries strongly resisted an explicit requirement that printing be done in the country granting the compulsory license. They argued that some countries did not have the facilities to print translations or reproductions.

It was also argued, incorrectly, that this imposed a “manufacturing clause." But the manufacturing clause requires an American author to print his books in the U.S. as a condition for securing U.S. copyright. The printing limit proposed by Argentina and Great Britain was a limit on developing countries that grant compulsory licenses, to protect the author against an expanded use of those licenses. The limit would not restrict the author's right to have his book printed where he chooses. If he grants a voluntary license to a publisher in a developing country, the limit would not apply.

Actually, the limitation was already inherent in the provisions of V ter and V quater which prohibited the export of copies made under compulsory licenses and prescribed that the licenses "be valid only for publication" in the licensing country. Article VI of the UCC defines “publication" as "the reproduction in tangible form and distribution to the public of copies of a work. .."

After much discussion, a formal "interpretation" of Articles V ter and quater, and the corresponding Articles in the Berne Convention, was prepared by a joint drafting committee of Berne and UCC countries for insertion in the reports of both conferences. The interpretation has essentially the same effect as an amendment of the texts. It declares that the provisions prohibiting "export” of copies and making compulsory licenses "valid only for publication" in the country granting the license "are considered as prohibiting a licensee from having copies reproduced outside" that country. However, it then declares that the prohibition does not apply where the licensing state does not have printing or reproduction facilities, or its facilities “are incapable for economic or practical reasons of reproducing the copies"; the copies are reproduced in a Berne or UCC country; they are returned in bulk to the licensee; the reproduction is lawful where done; and it is not done in a plant especially created for reproducing works covered by compulsory licenses. The interpretation also states that V ter and V quater do not prohibit a compulsory licensee from employing a foreign translator, or several licensees in different countries from using the same unpublished translation. The interpretation states that no compulsory license should be used for commercial purposes.

EFFECT ON AUTHORS' RIGHTS How adversely these last minute changes will affect authors' rights needs more careful consideration that the delegates could give, and a better knowledge of publishing than many of them possessed. The chairman of the Conference, in his closing remarks, observed that the system of compulsory licenses would not satisfy "the world of authors” in the developed and developing countries. He hoped that compulsory licenses would be an exception, as they had been since 1952. And a principal reassurance offered authors by the architects of the 1971 revisions is that few licenses will be issued. But if that is so, then there is no need to adopt these new provisions which sharply downgrade the level of protection in UCC and Berne. A more realistic forecast may be a substantial increase in compulsory licenses: because the time period for translations is reduced from seven years to one year, or three years; because compulsory reproduction licenses are expressly sanctioned ; and because the last minute changes on "outside" translation and printing make compulsory licenses cheap and easy to use.


Some architects of the 1971 revisions assume it contains reasonable safeguards for authors. But, as the chairman noted, their views are not likely to satisfy the "world of authors," and with good reason. First, the architects cite the "limited” purpose of compulsory licenses. But "education," "scholarship" and “systematic instructional activities" have been broadly interpreted in the Report, and by delegates from several developing countries, so there is no real obstacle to the compulsory translation or reproduction of books for sale, in large part, to a general reading audience. Moreover, there is no practical way for an author to stop the improper issuance or misuse of a license.

Second, the architects assume that authors and publishers can prevent compulsory translation licenses by having authorized translations published. But translations cost money to prepare and to publish. And they must be kept in print, since a six-month lapse would still open the door for compulsory licensing. Actually few authors or publishers could afford the expenses of issuing translations of a book into several languages as insurance against compulsory licenses. They need some hope of an audience, and market, for the translation; and it is precisely that which the compulsory license system may deny them. The architects also suggest that authors can prevent compulsory licenses by issuing a translation in the six- or nine-month grace period after the request for a license is received. But even assuming translations could be made and published so quickly, this is totally unrealistic. The applicant is not obliged to exercise his compulsory license within a specified time, or to use it at all. Once he gets it, he can just sit with it. Therefore, an author or publisher could not know whether he was spending money for a translation to defeat a compulsory license that never would be used. Furthermore, while publication of an authorized translation, anywhere, would prevent a compulsory translation license for that language, it exposes the translation to a compulsory reproduction license.

If the 1971 UCC comes into effect, American authors and publishers will be faced with these problems for the thousands of works already in print that have not been translated into French, Spanish, Portuguese, or other languages used in developing countries.

CAN AUTHORS PROTECT THEMSELVES ? Third, the architects assume that authors can protect themselves against compulsory reproduction licenses, and terminate translation and reproduction licenses that have been granted, by distributing copies of an authorized edition in the developing country which issued the license. But this requires not only distribution, but distribution at a "price reasonably related” to the price “normally" charged there "for comparable works.” Finding a distributor in some rountries can itself be a problem. Finding one who will sell an authorized edi. tion in competition with the compulsory-license edition may be more of a problem; even when the license terminates, the backlog can be sold off. The difficulties may multiply where the developing country owns or controls its publishing facilities. Will a state-owned publishing house distribute the author's

authorized edition if that terminates its compulsory license to issue the work, or prevents it from obtaining a compulsory reproduction license at a low royalty? Even if the author or publisher can find a distributor, can their authorized edition meet the second requirement; can it be sold at a "price reasonably related to that normally charged” for comparable works, if the comparable works are sold at a narrow mark-up, or at cost, or below cost, by a state-owned or subsidized publisher, or acquired cheaply (or free) from a foreign state under the "outside printing" interpretation?

Fourth, the architects note that a compulsory license cannot be granted until the owner's authorization has been requested and denied. But what choices face the author or publisher who receives a request for authorization to translate or reproduce a work? As noted, he cannot afford to rush a translation into print each time. He can accept, reject, or bargain for better terms than the applicant offers. If the royalty offered him is unsatisfactory, his chances of increasing it by bargaining are as slight as his bargaining power. He is under the gun. If he rejects the royalty offered him, the applicant will receive a compulsory license, with the royalty rate fixed by authorities in the developing country. And with this alternative, it is unlikely that those requesting his authorization will offer him generous terms.

No minimum royalty is specified in the 1971 UCC. It requires only that compensation be "consistent with standards of royalties normally operating in the case of licenses freely negotiated between persons in the two countries concerned.” If the author is not satisfied with the rate fixed by the authorities of the developing country, under this broad mandate, he could challenge it only in the courts of the developing country. In fact, all objections to the issuance of licenses woud have to be made there. That requires a considerable investment for every license, with not too promising a chance of success. The 1971 UCC provides no other forum for authors or publishers aggrieved by their treatment in developing countries.

Even allowing for a substantial discounting of these possible dangers, a compulsory licensing system is a dismal prospect for the "world of authors" in developed and developing countries. It becomes more dismal if several developing countries can issue compulsory licenses for the same work, use on translator to translate if, and have the translation printed in quantity in one plant in another country; or have a large quantity of copies run off in the plant under reproduction licenses issued by all of them. Mass production is possible. And compulsory licensing becomes an even more attractive alternative to voluntary arrangements between the author and developing countries that want to use his work. It also offers some developed countries an inexpensive means of extending aid to unuderdeveloped countries, i.e. printing cheap, mass paperback editions of books by authors from other developed countries. Under the "outside printing” interpretation, each developing country will decide whether its own printing facilities "are incapable for economic reasons of reproducing the copies" of foreign works for which it issues compulsory licenses.

As the chairman of the UCC conference suggested, compulsory licensing should not be the ordinary means of providing for publication in developing countries. It should be the rare exception, used only where voluntary negotiations cannot secure for a developing country the right to publish a book it truly needs for educational purposes, and then with fair compensation for the author. Authors are entitled to ask for a rigorous analysis of the complsory licensing system are entitled to ask for a rigorous analysis of the compulsory licensing system created at both Paris conferences, in the texts and by the interpretations, to determine whether it is likely to produce only a few compulsory licenses or to encourage their

use as a fundamental means of acquiring translation and publishing rights. For if the latter result develops, authors will, in effect, be compelled to subsidize "developing" countries, including some well able to pay normal royalties. This is a sacrifice not asked of manufacturers of soft drinks, industrial equipment, automobiles or other products—including those purchased by developing countries for the construction or operation of schools. Nor is it a sacrifice likely to be asked of translators who will translate under compul. sory licenses, or publishers who will be granted those licenses in developing countries. If subsidies are required to aid education in developing countries, they would more appropriately come from the governments of developed countries, including funds to pay royalties on copies translated or reproduced in developing countries under voluntary licenses.

Ultimately the Senate will have to decide if the United States ratifies the 1971 UCC. If it does not, the United States would remain a party to the 1952 UCC, and the new compulsory licensing provisions would not apply to American works. Moreover, the Paris Act of the Berne Convention would not become effective. Developing countries might leave Berne or the UCC. They would then be free to institute compulsory licensing systems of their own devising, or deny any protection to foreign works. But their works would not be entitled, under the Conventions, to protection in other countries. Retaliation in the long run, if not the short, might persuade them to remain in the UCC or rejoin it.

Ratification would freeze a, compulsory license system into both Berne and I'CC for decades to come, available to a majority of the members of the U.N. for an unpredictable period of time. When, for example, will Brazil or Yugoslavia or India decide they have become developed countries? If Brazil or Yugosla via or Israel are still developing countries, how long will it take for less developed developing countries to become developed? These are some of the questions left unanswered by the Paris Conferences. And in the shadow of these questions, a careful analysis of the effects and consequences of the two new conventions is imperative, before the Senate decides what action the United States should take.

Mr. BRENNAN. The Educational Media Producers Council. The witnesses are Mr. Otterman, David Engler, and Robert Frase.



Mr. OTTERMAN. Mr. Chairman, my name is Lloyd Otterman and I am chairman of the Educational Media Producers Council (EMPC) and vice president of BFA Educational Media. I am appearing here today

on behalf of EMPC and with me are David Engler, chairman of the ÈMPC Copyright Committee and Robert W. Frase, economist and consultant on copyright to EMPC.

We have submitted formal testimony to this subcommittee. I ask now that it be included into the record.

Senator BURDICK. Without objection, it will be included.

Mr. OTTERMAN. I will be highlighting those formal remarks in an effort to meet the time constraints we have here today.

We are here to give you our views on S. 1361, and specifically on the issues involved in the educational use of copyrighted audiovisual materials. We support the bill as introduced and oppose amendments which would weaken the protection provided in the bill to those materials.

Let me sketch briefly the economics of producing audiovisual materials for education. This background will be helpful in understanding the importance of appropriate copyright protection in order to insure the continued development of high quality materials for educational use.

EMPC has some 70 members who produce audiovisual materials for use in schools and libraries-materials such as motion pictures, filmstrips, slides, transparencies, and sound recording. We estimate that our members produce 80 percent of these educational audiovisual materials.

In 1972 total sales of educational audiovisual materials amounted to $215 million, produced by some 200 companies; thus the industry is clearly one of active competition among quite small firms.

These materials are designed for instructional purposes, and have no market among consumers in general or for general entertainment.

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