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STATEMENT OF GERHARD VAN ARKEL, GENERAL COUNSEL, INTERNATIONAL
TYPOGRAPHICAL UNION The International Typographical Union, with a membership of some 114,000, represents printers throughout the United States and Canada. It is affiliated with the International Allied Printing Trades Association, composed of unions in the graphic arts field, and with the AFL-CIO. Our purpose here is to support the provisions of section 601 of the proposed bills, the so-called manufacturing clause.
The history of this clause was carefully analyzed by the Honorable Sam B. Warner, former Register of Copyrights, in a speech to the Book Makers Institute Convention in October 1951. He pointed out that the original Copyright Act of 1790 provided no protection whatever to foreigners, in this respect following British law. This led to complaints by American authors that they were discriminated against, since no royalties were paid British authors, and to wholesale pirating of British titles by us and of American titles by the British. Mr. Warner noted that the manufacturing clause "was chosen as the way out of this dilemma of how to secure both royalties for English authors and cheap English books for American readers.” It was first suggested by a group of Boston booksellers in 1838. (See memorial of the Book-sellers of Boston against the passage of the International copyright law, 25th Cong., 2d sess., H. Doc. 340.) It won gradual acceptance and was incorporated in the Copyright Act of 1891. Thereafter England also allowed our authors to copyright their works there; pirating ceased and all parties were protected. This principle was carried forward in the Copyright Act of 1909.
But foreign authors experienced some difficulty in obtaining copyright in this country. In 1949 the requirements were notably relaxed so that authors and book manufacturers might introduce into this country 1,500, rather than 1 copy ; they were permitted 6 months rather than 60 days to register their book; and they were required to manufacture within the United States within 5 years rather than within 6 months. The union members of the International Allied Printing Trades Association, including the ITU, at that time supported these amendments. They were based on a simple theory; namely, that by importing 1,500 copies, over a period of 5 years, foreign manufacturers would have an opportunity to test the American market to determine whether an American edition was desirable. We felt then, and we feel now, that these were generous concessions to the interest of foreign authors and manufacturers.
It should be borne in mind that there are presently large exemptions from the manufacturing clause; for books in other than the English language, for books in English by foreign authors, for the blind, and for others. The history of the clause thus shows that this was not some protectionist scheme dreamed up by greedy book manufacturers and those representing their employees; it was a condition attached to a much-desired privilege, that is, copyright in this country for foreign authors and manufacturers.
Basic, we feel, to any discussion of the merits of this clause is the fact that it has nothing to do with free trade. There is today free trade in the import of books into the United States except for the purely nominal 3 percent or 7 percent tariff, which it is proposed to abolish. There is no statute or any other restriction on the importation of books, except perhaps for such matters as libelous, pornographic, or subversive writings.
This committee is considering copyright law. The whole point and purpose of a copyright is to grant a monopoly. Those who advocate the elimination of the manufacturing clause seek both free trade and the grant of an unlimited monopoly, within the United States obtained, under the Universal Copyright Convention, by the mere act of printing a symbol on the work. Easing the requirements for obtaining a monopoly can hardly be described as a victory for free trade. Hence this problem is not to be settled by falsely portraying it as a battle between free traders and protectionist interests. The only valid questions before this committee are whether American law properly may impose conditions on the grant of a monopoly, and if it may, what conditions are proper.
As to the first question, the answer admits of no doubt. The congressional power in this area stems from section 8, article 1, of the Constitution, granting the Congress the power "To promote the Progress of Science and useful Arts, hy securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Manifestly, this must mean to promote the progress of the useful arts within the United States ; it is hardly to be supposed that the framers of the Constitution were concerned with their promotion abroad. Thus we say that the Constitution not only permits, but requires, the Congress to exercise its power in the American interest and thus enables it to impose such conditions on the grant of these monopolies as it deems wise.
The second question is whether the manufacturing clause is a reasonable and desirable limitation on such a monopoly grant. We assert that it is. It rather obviously rests on the premise that the foreign manufacturer shall be subject to the competition of the American book manufacturer on an equal and nondiscriminatory basis, without the grant of a monopoly; or, if he wishes a monopoly, that he must publish the excess over 1,500 copies in this country, within 5 years-hardly onerous conditions. Insofar as competition in this field is concerned, the foreign manufacturer, as we show subsequently, has a sometimes spectacular advantage over his American competitor in the lower wages he pays. We assert that foreign manufacturers ought to have the right, which they now have, to shop around the world to find where their work can be done under the most degrading standards, or the right to a monopoly in this country, but not both. As I have pointed out, the advocates of repeal of this clause seek free trade with a monopoly at the end of it.
It is of course difficult, if not impossible, to obtain completely accurate comparisons of wages as between different countries ; such matters as fringe benefits, currency changes, differing work weeks and the like may somewhat distort any calculations. But these minor variations cannot conceal the vast discrepancies between United States and foreign wage rates. In 1963, we calculate that the average wage of the ITU members in the United States was at an hourly rate of about $3.50 with a daily rate of about $27. In Belgium, the 1964 ILO Yearbook of Labor Statistics shows it was about $0.75 per hour for men and $0.38 for women; in Denmark, about $1.30 for men and less than $1 for women; in France, less than $1 for men; in West Germany, about $1.10 for men and $0.60 for women; in Italy, about $0.70 for men; in Luxembourg, about $0.80 for men; in the Netherlands, about $0.77 for men; in Norway, about $1.25 for men and $0.85 for women; in Sweden, about $1.50 for men and $1.10 for women; in the United Kingdom, about $1.16 for men and $0.80 for women. These figures are roughly computed on average hourly or weekly rates without considering fringe benefits which are substantial in all countries, including the United States; for example, we believe that there would be a still wider variation if earnings at overtime rates in the United States were included in the computation. But the highest wage rate, that in Sweden, is less than half the U.S. rate, and the lowest, that of Belgian women, is only a little more than a tenth. We have not even attempted to compute the rates for Japan and other Far East countries, or for South America but believe that they are substantially below even these figures. Nor is there any reason for believing that present figures are materially different from those of 1963, the latest year for which statistics are available.
The importance of these discrepancies ought to be considered in the light of other developments in the industry. One of the more important is the development of the jet airplane, which makes it possible to get copy from the United States to foreign countries about as quickly as from New York to New Haven. The other is the technological revolution which has been going on in the industry, including principally computers and photographic typesetting and a host of associated devices, which make it entirely feasible to perform work abroad which, for technical reasons, could not be handled there within even comparatively recent years. In short, distance is no longer an equalizer of competition to any significant degree, and is steadily becoming less so.
We are heartened by the fact that the Register of Copyrights has recommended the inclusion of section 601, retaining the basic principle of this legislation. As he notes at page 144 of part 6 of his Report on Copyright Revision, “the manufacturing requirements would be much more limited in scope than those of the present law." The principal change, we feel, is one, to which we do not object, that violation of the clause should not deprive copyright owners of rights, such as performing, dramatization, motion picture rights, and the like which are not related to the reproduction and distribution of copies. These other rights are foreign to our interest, and we welcome this degree of protection for authors and other interests. While we could discuss the many changes proposed at considerable length, we shall confine ourselves to three points.
First, we would urge that provisions be included to exempt from the operation of the clause works produced in a country where wage standards are substan
tially comparable to those of the United States. We think immediately of Canada ; there may be others, and if in the future other countries approach our standards they too should be exempted. Our whole concern is that competition should be on a fair basis, and not to see which country can starve its printing trades workers the quickest. Where equal, or approximately equal, conditions prevail we are confident that American manufacturers and their employees can meet such competition. But we do not believe that foreign nationals should have the right to take advantage of the most exploited group of workers to be found, and also be granted a monopoly of the American market. One or the other, but not both.
Second, we are troubled by the proposed increase in the number of permissible copies to be imported from 1,500 to 3,500. This is a jump of over 100 percent. The only explanation of this proposal we have seen is to be found at page 145 of part 6 that “this figure was suggested as the point, in the present book market, beyond which it is generally more costly for a publisher to import copies than to manufacture an edition here." We are not told by whom this was suggested, or the data on which it is based. The criterion used seems to us a departure from previous approaches to this problem, which were based on giving foreign manufacturers an opportunity to test the market, and not on preserving the competitive position of domestic manufacturers.
What the Register's statement appears to mean is that it is not, in general, profitable to produce an edition of less than 3,500 copies, and that we will there. fore concede full copyright protection to the foreign enterprise on the unprofitable less-than-3,500 business. We feel this to be a wrong approach. The testing of the market is still the proper criterion. We recognize that the market is larger than it was in 1949, and that perhaps some greater opportunity to test should now be accorded. We would not oppose some modest increase in present figures, perhaps to 2,000, but the market has not increased over 100 percent and we surmise that the figure of 3,500 is either an arbitrary guess or is based on an improper standard.
The third, and by far our most important problem, relates to what I shall call reproduction proofs, though actually the problem is much broader and includes a host of new and substitute processes which have come to replace traditional methods of typesetting. In one way or another, as already suggested, these new processes make it possible to set type outside the United States but, by reproducing it on film, paper, tape or in another form, avoid the shipment of the actual type into this country.
That this practice is a clear violation of existing law appears to us to admit of no reasonable doubt. Section 601 (c) of the present act provides that the requirements of the manufacturing clause are met if books have been printed from "type set in the United States" or from "plates made in the United States from type set therein" or, if it is by a lithographic or photoengraving process, then "by a process performed wholly in the United States." If any other process is used then "every step in their reproductive manufacture" must have been performed in the United States. We do not see how the statute can be read otherwise. This is not the appropriate forum in which to file a brief on this problem, but it is a well-settled canon of statutory interpretation that one looks to the evil which Congress intended to eliminate to discover the meaning of language. The mere fact that the Congress did not in the statute passed in 1909 mention reproduction proofs or computers, both then quite unknown, is no adequate ground for permitting that this patent evasion of the congressional intent that works should be manufactured in the United States
That this is a correct reading is buttressed, we feel, by the bill, introduced by the chairman of this committee in the 2d session of the 88th Congress at the request of the Register of Copyrights, H.R. 11947, which in section 43(c) proposed to clarify the language of the statute by providing that "a copy has not been wholly manufactured in the United States if any step in the process of its reproductive manufacture, including but not limited to the composition of type and the preparation of sheets, film, plates, mats, reproduction proofs, tapes, or other devices for the reproduction of copies by any process, took place outside the United States."
The report of the Register already cited, at page 146, states that the “present law is unclear on this point” (whether reproduction proofs are included). He recommends that the Congress "maintain the status quo on the issue of foreign composition" by preserving the "ambiguous and awkward language of the 1909 statute.” This obviously means that the matter is to be left to subsequent
judicial determination as to the scope of the clause, and we are sufficiently confident of our interpretation to be content to leave it there. Our difficulty in this connection has been that this question can only be decided in an infringement suit, in which the defendent sets up the manufacturing clause as a defense. We are not publishers, and we have not been and are not likely to be sued for infringement. And while we have a lively and important interest in the matter, our legal interests are so indirect that we have no standing to bring suit; the penalty for a violation-loss of copyright-cannot be addressed to us or to any member. While we share the Register's dissatisfaction with the present uncertainties (which we feel are entirely fictional), we have therefore not been able to take affirmative steps to solve it judicially. Book publishers are understandably content to wink at these violations, and some book manufacturers have profited from them. Hence the matter has dragged on, but we are confident that it will be properly resolved in an appropriate case in the future.
While the Register has not said so, we feel that the change of position between the 1964 draft and the present bill is to be found at page 146 of his report. He there notes that "if the book publishers' construction of the disputed language in the present copyright statute is correct, it could be argued that a more restrictive provision in the revised law would violate the treaty obligations of the United States under the *** GATT." We disagree, and feel that if the Congress in 1965 wishes to clarify a statute adopted in 1909, it violates no international undertaking; the law remains what it has been all along. But be that as it may, the important word in the quoted language is "if.” If our construction of the clause is correct, it can hardly be argued that a statute adopted in 1909, some 40 years before the GATT had been drafted, violates any obligation of the United States under it. Nor do we feel that it can be seriously contended that the GATT has deprived the Federal courts of the power to interpret domestic legislation, whenever enacted.
We are, of course, opposed to any effort to legalize this practice, either in the form of a forthright amendment of the statute, or under the guise of interpreting existing law. We have stated our reasons-historical, economic, and moral—for believing that the manufacturing clause was and is wise legislation. To carve out this gaping exception cannot be justified; there is even less merit in the repeal of the entire clause.
There appears to be some feeling that the United States is alone in imposing conditions on the grant of a monopoly of its domestic market. Nothing could be further from the truth. Practically every country in the world including the United Kingdom has a so-called working requirement in the patent field, other than the United States; that is, manufacture in the country is a condition of maintaining patent rights (see Haddon: A Compendium of Patents and Designs, Law and Practice, 1931). Over the years there have been a host of other restrictions. In Mexico, for example, it is provided that the right to translate a work into Spanish is lost if not exercised within 3 years. Some countries, such as France, have simply forbidden importation of many classes of books altogether. Some impose prohibitive duties on works in their language. Others such as Brazil and Portugal have required licenses as a condition of importation which are rarely granted to works in Portuguese. Currency restrictions have been imposed. In brief, the grant of copyright has never been thought to carry with it the unconditioned right to make a profit from the copyright, and many countries. while granting copyright, have imposed a variety of conditions which make it meaningless. In short, it is totally inaccurate to view the United States as a dog in the manger, while other countries permit book importation without restrictions. We have not yet heard of any activity on the part of American citizens to remove the "working requirement" from British patent law as an unreasonable restriction, and we would regard such efforts as a highly questionable interference in a matter of domestic British law.
Whatever our differences with the various publishers' associations, we do share their concern with some of the proposed "fair use" amendments now being proposed. We think the more extreme of these proposals, which would allow substantially unlimited copying for some or all purposes and by some or many groups, amount to the substantial repeal of all copyright legislation. Manifestly, an author can look only to a publisher for the royalties which are his incentives to write. In many fields of publishing, the very lively possibility now exists that with computerized retrieval systems and unlimited copying rights, a single copy of a work could supply the national demand. What author can live on, or what
publisher can afford to publish for, the income from a single copy of a work? If adopted, these proposals would have a highly adverse effect on scholarship in many fields in which, even under present conditions, the market is so highly specialized as to make publication hazardous or impossible.
It is our view that the constitutional provision with respect to copyright lays on the Congress an affirmative duty to see to it that the rights of authors and publishers in their works be protected. We recognize that there can be, and has been, a lively debate as to just what those rights should be. But we think there cannot and should not be any debate as to whether they should be eliminated by granting the right to unlimited copying to any group, however beneficient its purposes.
If the Congress accepts the recommendation of the Register and adopts section 107 of the proposed bill, we think it should be made entirely clear that the adoption of this provision is not intended to broaden the limited right of fair use as heretofore interpreted by the courts. There is all the difference in the world between a library photocopying an occasional page of a work for the use of a scholar, and the making of multiple copies of entire works by any of the photographic processes which may now substitute for printing, presswork and binding. We have no desire to inconvenience scholars or librarians, but their convenience ought not to become a pretext for the repeal of the copyright law. It will be sufficiently difficult to police copyrights as photocopying and other processes become less costly, more versatile, and more widely disseminated, without a statutory diminution of the legal rights of the holders of copyrights.
In conclusion, then, it is our position that the Congress ought to encourage higher wage rates abroad by exempting from the manufacturing clause products coming from countries with working conditions comparable to those in the United States; that it ought to reject the 3,500 proposals on importation in favor of a far more modest increase; that it should adopt the Register's position on the issue of reproduction proofs and similar new and substitute processes; and that it ought to reject any proposals to broaden the concept of fair use as heretofore developed by the courts. We suggest that all of these proposals are clearly in the national interest.
SUPPLEMENTAL STATEMENT OF GERHARD P. VAN ARKEL
SEPTEMBER 18, 1975 I turn now to that part of Section 601 which grants a specific exemption for Canada. We are in favor of this provision and urge that it be retained.
In taking this position, we are gladly carrying out a commitment which we made, along with others, in the so-called Agreement of Toronto. This Agreement was the outgrowth of a meeting in Toronto on February 16, 1968, of representatives of the U.S. and Canadian business and labor organizations concerned with printing and publishing. The purpose of this meeting was to discuss three interrelated issues of mutual interest, namely, an exemption for Canada from the U.S. manufacturing clause, Canadian acceptance of the Florence Agreement, and effective resistance to weakening of international copyright protection. After a thorough discussion of all aspects of these interrelated issues, unanimous agreement was reached on four courses of action. A brief memorandum summarizing the points of agreement was carefully drafted and then approved by all members of the Canadian group and the U.S. group in March, 1968.
You may recall, Mr. Chairman, that Robert W. Frase, then Director of the Joint Washington Office of the American Book Publishers Council and the American Educational Publishers Institute, who signed on behalf of the U.S. group, wrote to you on April 1, 1968, about the Toronto Agreement and enclosed a copy of it. For the record, I would like to submit a copy of Mr. Frase's letter to you, together with a copy of the Toronto Agreement which was enclosed with that letter.
In negotiating the Toronto Agreement, the U.S. group sought assistance in achieving three major objectives: (1) assistance of the Canadian Government in opposing the Stockholm Protocol or similar actions weakening international copyright; (2) Canadian adherence to the Florence Agreement; and (3) removal of any remaining barriers to trade between Canada and the United States affecting the printing and publishing industries. The main objective of the Canadian group was to secure the elimination of Canada from the effects of the manufacturing clause as part of the General Revision of the Copyright Law. Both groups were extremely pleased at the Agreement and felt that real progress could be made to achieve all of the objectives of both groups.