tion was claimed on the basis of such formal reciprocity; in other words, such foreign nationals enjoyed national treatment (such kind of reciprocity was prescribed, for example, in the Swiss Law of 1883).

By the time the Berne Convention was adopted in 1886, bilateral agreements offered the typical legal basis for international copyright protection. Prussia was the pioneer in this field; it concluded bilateral agreements with the other German States from 1827 to 1829. Later, Belgium, the United Kingdom, France, Spain and Italy also actively participated in the establishment of bilateral agreements. In 1886, a complex network of such agreements existed among a great number of European countries (and some Latin American countries).

The experiences gained on the basis of the first bilateral agreements had significant influence on the evolution of international copyright relations, in general, and on the application of the principle of national treatment, in particular. For example, the first inter-German agreements were based on the principle of national treatment. However, at the time of the conclusion of those agreements, there were great differences in the extent of protection granted by the various German States; in some of them, efficient protection was granted, while in others, copyright protection was practically non-existent. This drew attention to the fact that national treatment alone was not sufficient for a reasonable international copyright protection system. In the later bilateral agreements, the obligation to grant national treatment was combined with the obligation to grant at least a minimum level of protection.

The evolution of inter-German copyright relations which followed the conclusion of bilateral agreements is also worthwhile noting. The important differences that existed in the level of protection in the German States-in harmony with the general process of German unification-gradually disappeared, and similar laws were adopted everywhere. This contributed to the emergence of the idea that a universal codification of copyright law was not only desirable but also feasible.

Against the background of the successful all-German codification of copyright law, it is quite understandable that during the Berne diplomatic conferences in 1884, 1885 and 1886-which led, in 1886, to the adoption of the Berne Convention-the German delegation was the strongest supporter of a convention providing for a universal copyright law. At the end of the first session of the 1884 conference, the German delegation asked the following question: "Instead of concluding a Convention based on the principle of national treatment, would it not be preferable to work from the outset towards a code providing for a uniform regulation, throughout the projected Union, within the framework of a Convention, of all provisions concerning the protection of copyright?" (See page 24 of the "Actes de la Conférence internationale pour la protection des droits d'auteur réunie à Berne du 8 au 19 september 1884".) This idea, however, was opposed by a number of other delegations. Although those delegations accepted the idea of uniform international codification as a long-term goal, they supported a more pragmatic approach. They pointed out that, due to the differences in existing laws, the ambitious project proposed by the German delegation would take a long time and that, therefore, it would be more appropriate to work out a convention that was acceptable by the largest number of countries and to reach the desired uniformity by successive development.

This pragmatic position was finally accepted in Berne in 1886. Since then, the obligation to grant national treatment, combined with the obligation to provide for the minimum protection determined in the Berne Convention, has remained the basic structural characteristic of the Berne Convention. The objective outlined at the Berne diplomatic conferences to proceed towards the final goal of establishing universal copyright codification has not been forgotten or neglected during the more than 100-year history of the Berne Convention. However, this goal will probably never be fully attained.

During the various revision conferences (Paris 1896, Berlin 1908, Rome 1928, Brussels 1948, Stockholm 1967, Paris 1971), the minimum level of protection was gradually increased or at least adapted to new developments. As a result of this modernization, the Berne Convention now provides for fairly comprehensive and detailed substantive regulation on the minimum standards to be granted in countries party to it.

The regular, substantive revisions of the minimum obligations contributed to a reasonable and relatively conflict-free application of the principle of national treat

ment.

In the original 1886 text of the Berne Convention, there were two exceptions to the obligation to grant national treatment (under Article 2(2) of the said text): first, in respect of formalities, as conditions of protection, not the country of protection but the country of origin was applicable, and, second, in respect of the duration of protection, the principle of "comparison of terms" was prescribed (the duration of protection was not to exceed the term of protection in the country of origin).

The two exceptions revealed that it was being recognized that blind application of national treatment might create undesirable contradictions and that it would even go against the interests of copyright owners which it was to serve.

If a copyright owner had had to comply with all the different formalities in all the countries where he wished to enjoy copyright protection, it would have made the obtention of protection very burdensome and, in certain cases, even impossible. Thus, in this respect, the exception to national treatment was indispensable (an exception which later, with the 1908 Berlin revision of the Convention, where formalities as conditions of protection were abolished, became unnecessary).

The introduction of "comparison of terms" was justified for another reason. The history of the evolution of the principle of national treatment in bilateral agreements before the adoption of the Berne Convention had proved that that principle could only resist the bearing test of important substantive differences up to a certain limit. Beyond that limit, it might become unacceptable to countries which grant much more generous protection than others. The difference between a more or less high level of protection of works in one of the countries and no protection at all in the other country (because the term of protection had lapsed) seemed to go beyond that limit. (Later, during the 1967 Stockholm revision, the relevant provision was made more feasible. Now the comparison of terms is not prescribed as a kind of obligation, but, with the insertion of the phrase "unless the legislation of that country otherwise provides," only as the basic option).

With the development of copyright theory and legislation, and, particularly, with the advent of newer and newer technologies, new categories of works and new means of exploitation of works (with the need for new rights or for new ways of applying old rights), new strains and contradictions emerged around the principle of national treatment. Those strains and contradictions, however, were eliminated one after the other, and the possibility of a relatively conflict-free application of that principle was, thus, maintained. This took place in the following two ways:

First, in respect of those categories of works or rights which were of relatively marginal importance from the viewpoint of normal exploitation of copyright and, at the same time, on which there was no realistic hope to reach agreement on minimum provisions, esceptions were allowed to the obligation of national treatment. This was the case in respect of works of applied art (see Article 2(7) of the 1971 Paris Act), which were marginal in the sense that they were at the border between copyright and industrial property and that frequently industrial property rights were granted for their protection; in respect of works qualifying for protection by virtue of the "back-door" provision (see Article 6(1) of the 1971 Paris Act), which were marginal because they had been created by authors who were nationals of countries not party to the Berne Convention; and in respect of the droit de suite (see Article 14ter(2) of the 1971 Paris Act), which was marginal because it related to an act (resale of copies of works) in respect of which, in general, no rights were recognized under the Convention and which concerned only certain categories of works. This seems to be also the case in respect of the public lending right concerning books and similar publications (recognized, as discussed in Part IV, below, on the basis of a de facto subsequent agreement among the countries party to the Convention), which is marginal because it relates to an act that traditionally has not been considered to be part of the normal exploitation of works and whose source is quite exceptional in the field of copyright, namely, in the majority of cases, the budget of the government or the municipalities concerned.

Second, in respect of those new categories of works and those new rights (or those new variants of old rights) which were important from the viewpoint of an efficient protection and normal exploitation of literary and artistic works, and from the viewpoint of the legitimate interests of copyright owners, the desirable way of eliminating the strains and contradictions which had emerged as a result of substantially different provisions (or absence of provisions) in the national laws of the various countries was the subsequent updating of the minimum obligations under the Convention. This method was successfully applied during the various revision conferences until 1971, when the last revision conference took place in Paris (or rather, until 1967, when the last revision conference took place that truly brought about an updating of the minimum level of protection under the convention).

Since 1971, no revision of the Berne Convention has taken place, although during the more than two decades since then, perhaps more important developments have taken place in the creation, dissemination and conditions of protection of works than between the adoption of the Convention and its last revision in 1971.

As a result, a growing number of important differences started to appear in the national laws of the countries party to the Berne Convention, not only at the margin, but in the very center, of copyright protection in respect of basic categories of works and of rights of fundamental importance. Those growing differences have led

to new challenges to the principle of national treatment. The countries which provide more generous protection than others try to avoid what they consider to be an unjustified unilateral burden by denying or, at least, restricting the application of national treatment by different means and on the basis of different arguments.

The absence of appropriate new standards is, of course, only one of the reasons for new challenges to the principle of national treatment, since certain countries with negative balances in the field of international exchange of protected works (and the related copyright fees) favor the restriction of this principle just to avoid the obligation to pay copyright fees to foreigners whenever possible. However, it is also obvious that the principle of national treatment may only be freed from the increasing pressure, and its continued application may only be guaranteed if the growing discrepancies in respect of various important aspects of copyright protection are eliminated or, at least, decreased to a bearable level through a new updating of the minimum protection prescribed by the Berne Convention.

This is one of the most important objectives of the proposed protocol to the Berne Convention.

IV. NEW CHALLENGES TO THE PRINCIPLE OF NATIONAL TREATMENT AND THE
PROPOSALS OF THE INTERNATIONAL BUREAU OF WIPO TO RESPOND TO THEM

The new challenges to the principle of national treatment, and, particularly, the different means of, and arguments and methods used for, creating exceptions to the application of that principle, referred to at the end of the preceding part of this statement, are analyzed in detail in paragraphs 83 to 128 of the working document prepared by the International Bureau of WIPO for the third session of the Committee of Experts on a Possible Protocol to the Berne Convention to be held in Geneva from June 21 to 25, 1993 (document BCP/CE/III/2-III). The analysis is followed, in paragraphs 129 to 132 of the same document, by proposals on how the question of national treatment be addressed in the possible protocol. It seems that it is the most appropriate to reproduce the relevant part of the document in the written version of this statement and to only restrict it to a summary during the oral presentation thereof. The said part of the document reads as follows:

DIFFERENT MEANS OF, AND ARGUMENTS AND METHODS USED FOR, CREATING

EXCEPTIONS TO NATIONAL TREATMENT

83. Recently, certain arguments have emerged in copyright literature, and also, some attempts have been made at the level of national legislation to create exceptions to national treatment in cases other than the abovementioned four exceptions allowed by the Berne Convention. The exception may consist of simply denying national treatment or replacing it by reciprocity. Denial means that a given provision in national law applies only to nationals, that is, it does not apply to foreigners. Reciprocity means that a given provision in the national law applies to foreigners only if, and to the extent to which, their country provides for the right and makes it available to foreigners. The existing four exceptions in the Berne Convention to national treatment are all of this latter kind, that is, they provide for reciprocity.

Arguments alleging that certain payments are not covered by the Berne
Convention

84. The Berne Convention covers the "rights of authors in their literary and artistic works" (see the preamble of the Convention). National treatment must be granted "in respect of works for which... [authors] are protected under [the] Convention, in countries other than the country of origin," and this treatment must extend to "the rights which their respective laws [that is, the respective laws of the said countries] do now [that is, at the time of the adoption of the Convention] or may hereafter (that is, any time after the adoption of the Convention] grant to their nationals" (Article 5(1)).

85. The "respective laws" of the countries that are obliged to grant national treatment under the Berne Convention are any laws that provide for "rights of authors in their literary and artistic works." The name or title of a law, and the fact that the law may also contain provisions the subject and nature of which concern other rights, do not affect the obligation to grant national treatment in respect of the "rights of authors in their literary and artistic works." The mere fact that such rights are, in the law, called something other than copyright or author's rights (e.g., rights alleged

to be cultural endowments or tax law institutions), does not change their legal nature and does not remove the obligation to grant national treatment.

86. Naturally, one has to decide what rights are covered by the notion of "rights of authors in their literary and artistic works." Rights mentioned in the Convention, or being of the same nature as those rights, are obviously covered. Thus, if the right is, e.g., an exclusive right to authorize a certain use of literary and artistic works, there is no doubt that national treatment must be granted in respect of such a right. The same is true if the right is a mere right to remuneration where such a right is admitted, merely as an alternative to an exclusive right of authorization by the Berne Convention (c.f., Articles 11 and 13). At the same time, if authors have a right to payment which does not relate to the use of their works (but, e.g., the payment is due to them as an endowment, taking into account their profession as authors, as a contribution to promote national creativity), it cannot be said that such a right is a right in their literary and artistic works. Consequently, such a right is not covered by the obligation to grant national treatment.

87. Sometimes it is argued that the fact that it is not the actual users of works who pay for the use of a work-but e.g. the government or the municipality that pays the right to payment is not of the nature of rights covered by the Berne Convention. However, if a right in literary and artistic works takes the form of a right to remuneration for the use of such works, it is irrelevant-from the viewpoint of whether or not the right is covered by the Berne Convention and its principle of national treatment-who pays the remuneration. Usually, it is the person or entity who or which carries out a qualified act (user) who pays; however, even if the law provides otherwise and obliges some other persons or entities to pay, or if the State itself undertakes to pay, as long as the remuneration is to be paid for the use of literary and artistic works, it cannot be seriously questioned that the right to such remuneration is a right in literary and artistic works covered by the obligation to grant national treatment.

88. The first significant right in respect of which the question emerged whether it is covered by the principle of national treatment was the socalled public lending right (for the definition of the right, see paragraph 10, above) which had been introduced in certain countries as a right to remuneration for the lending of books by not-for-profit libraries to the public.

89. In Germany, the public lending right is provided in the copyright law. In other countries, the public lending right is regulated outside the copyright law and is called by the government a kind of cultural or social endowment.

90. The basis for the collection of public lending right payments is either the number of books stocked in libraries, or the number of loans effected or both, which numbers are established mostly through sampling systems. A further method is—although it is only rarely applied that there is no sampling, and the amount of payment is calculated as a percentage of the annual public subsidy paid to libraries for purchasing books.

91. Public lending right payments are covered by public funds (in general, by government or municipal budgets) and collected by special institutions usually of semi-public nature-such as national authors' funds. In Germany, however, public lending right payments are collected and administered by private collecting societies (collective administration being a condition under the law itself)."

92. In some countries, the amount collected is paid to individual authors, although a certain percentage is retained for general cultural and social purposes. In other countries, there is no payment to individual authors; the whole amount collected is used for collective purposes.

93. Under the Copyright Law of Germany, national treatment does apply to the public lending right. The other countries where this right exists do not grant national treatment in this respect on the basis of the argument that this right is not part of copyright but a right to endowment, a special payment for the promotion of national creativity. In those countries, only nationals enjoy this right (that is, even reciprocity is not applied). In some countries, however, the right is extended to foreigners if they reside in the country or, under certain conditions, to authors of works published in the national language of the country.

94. It is submitted that, although the above-mentioned laws (other than the law of Germany) provide for public lending rights in laws other than

the copyright law, those rights, as discussed below (see the next paragraphs), are of the nature of copyright, that is, rights in literary and artistic works. Nevertheless, for the reasons also discussed below (see paragraphs 96 and 97), it is believed that the denial or restriction of national treatment in respect of the said rights is, as an exception, allowed in the countries party to the Berne Convention.

95. As is outlined above, public lending rights take different forms. These rights have, however, something in common; namely, that they relate to a specific use of the works concerned: lending copies by non-profit libraries to the public. Rights conferred upon authors not just because they pursue a profession, but because their works are used in a certain way, are of a nature of "rights in literary and artistic works." This nature of public lending rights is clearer where there is individual distribution, and particularly where the distribution is made on the basis of sampling of actual frequency of lending. However, the mere fact that sampling is not undertaken and distribution is made on some other basis (e.g., on the basis that the works concerned have been made available for lending to the public) does not change the fact that such rights are "rights in literary and artistic works." The question of providing for collective use of the payments rather than for individual distribution is discussed below.

96. Nevertheless, controversy concerning the denial of national treatment in respect of public lending rights has mainly emerged at the level of copyright theory; in the relationship of the member countries of the Berne Union, the fact that national treatment, with the exception of Germany, is denied in respect of these rights has not created any real conflicts; rather, it seems that there is general agreement among the member countries of the Union that the present situation at the national level is acceptable. This attitude of the member countries of the Berne Union may be considered a case described in Article 31(3)a) of the Vienna Convention on the Law of Treaties. Under Article 31(1) of the said Vienna Convention, “[a] treaty shal be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose." Article 31(3) of the Convention adds that "[t]here shall be taken into account together with the context:... any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions." The Vienna Convention is not applicable in respect of the Berne Convention since it is only applicable to treaties concluded after its entry into force, and the Berne Convention (even its latest 1971 Act) is not such a treaty. However, the Vienna Convention is a codification of customary international law, and, on the basis of customary international law, by and large the same conclusions may be reached as on the basis of the Vienna Convention itself.

97. It is proposed that it should be accepted that, since the adoption of the latest text of the Berne Convention, a de facto agreement of the member countries of the Berne Union has emerged about a fifth exception to the obligation to grant national treatment (concerning public lending rights for lending books by non-profit-making libraries to the public). However, it does not seem to be sufficient just to state this fact; all the necessary consequences of the said de facto agreement should be drawn.

98. First of all, it should be kept in mind that exceptions to the obligations under the Convention must not be interpreted in an extensive manner they should rather be interpreted in a restrictive manner. Consequently, it should be clarified that the fact that there is agreement that national treatment may be denied in respect of the right to remuneration for "public lending" of books is in no way an appropriate basis to deny national treatment in respect of any other right to remuneration for any other use of literary and artistic works other than books. Thus, inter alia, the admitted exception is not a basis to extend the scope of rights not covered by national treatment to the lending by non-profit-making public libraries of works other than books (such as audiovisual works, works embodied in sound recordings, computer programs, etc.). Actually, for the sake of a sufficiently solid basis to determine the limits of the application of this new, fifth, de facto exception to the principle of national treatment, it may be beneficial to include an explicit provision-like the one on the droit de suite-in the Berne Convention. The operation would be similar to the removal of a cancerous part of an organ; by sacrificing that part, there might be hope to stop the transmission and proliferation of the cancer.