Chapter III A. Issue Is the jukebox license in section 116 of the U.S. Copyright Act compatible with the Berne Convention? (1) with respect to musical works of foreign origin, the jukebox license under the current U.S. statute is probably incompatible with the Convention insofar as it permits the public performance of such works without the consent of the owners of copyright therein; (2) with respect to musical works of U.S. origin, however, the statute is compatible. C. Relevant Provisions of the Berne Convention Article 11(1) of the Berne Convention provides that: Authors of dramatic, dramatico-musical and musical works shall enjoy the exclusive right of authorizing: (i) the public performance of their works, including such public performance by any means or process; (ii) any communication to the public of the performance of their works. D. Relevant Provisions of U.S. Law The jukebox license in section 116 of the U.S. Copyright Act is one of four compulsory licenses in the current U.S. statute,' and it allows a jukebox operator to perform recorded musical works in public without the consent of the copyright owners upon compliance with the terms and conditions specified under the law. The royalty rate, initially set forth in the statute, is subject to periodic adjustment by the Copyright Royalty Tribunal.3 1. The other three licenses are considered elsewhere in this Report. See Chapter 1, Compulsory Cable License; Chapter 5, Mechanical License; Chapter 8, Public Broadcasting License. 2. Copyright Act of 1976, 17 U.S.C. § 116 (1982). 3. See 17 U.S.C. § 804. E. Discussion Article 11(1) of the Berne Convention calls for copyright owners to enjoy the exclusive right of authorizing public performances of their musical works. The reference in Article 11(1)(i) to public performance "by any means or process," is a reference to public performance by means of recordings. Thus, there is no question that performances of recordings on a jukebox in a public place are public performances of the underlying musical works within the meaning of this Article." On its face, the jukebox license in section 116 of the U.S. law deprives copyright owners of the exclusive right of authorizing public performances of their musical works on a jukebox. The only issue, therefore, is whether this compulsory jukebox license represents a permissible exception to the public performance right mandated by the Berne Convention. We believe that section 116 is probably not a permissible exception, at least insofar as it applies to works of foreign origin." Unlike other provisions of the Convention,' the public performance right in Article 11(1) does not expressly sanction compulsory licensing. Thus, the existence of expressly-approved compulsory licenses elsewhere in the Convention makes it difficult to infer the existence of an implied compulsory license in Article 11(1). As William Wallace has noted, "[t]his article does not contain any provisions similar to that of Article 11 bis(2) [authorizing compulsory licensing of the broadcasting right], and it must be therefore assumed that no exception to the exclusive right is allowed." It is true that the 1967 Stockholm Conference confirmed that member countries should be allowed to preserve in their national leg 4. See World Intellectual Property Organization, Guide to the Berne Convention for the Protection of Literary and Artistic Works (Paris Act 1971)¶ 11.4 (1978) [hereinafter cited as WIPO Guide]; S. Stewart, International Copyright and Neighbouring Rights 111 (1983). 5. See W. Wallace, United States Copyright Law and the Berne Convention ¶ 7(c) (1978) (hereinafter cited as Wallace (1978)]. 6. With respect to works of U.S. origin, the Convention provides that protection in the country of origin is governed by domestic law, so that the question of compatibility does not arise. See supra Foreword. 7. As discussed elsewhere in this Report, the broadcasting right in Article 11bis is expressly made subject to a permissible form of compulsory licensing. See supra Chapter 1, Compulsory Cable License; infra Chapter 8, Public Broadcasting License. The right to record musical works also allows a compulsory license under Art. 13(1). See infra Chapter 5, Mechanical License. 8. W. Wallace, The New U.S. Copyright Law and Compatibility with the Berne Conven tion 14 (1977) [hereinafter cited as Wallace (1977)). islation so-called "minor reservations" to Articles 11 and 11bis, among others, even though this possibility is not expressly acknowledged in the present text of the Convention. Nevertheless, the Conference made clear that the concept of "minor reservations" was intended to to refer to exceptions such as "religious ceremonies, performances by military bands and the requirements of education and popularization"; 10 there is no indication that it was meant to extend to a system of compulsory licensing. Indeed, if a compulsory license were considered one of the "minor reservations" implicitly permitted under the broadcasting right in Article 11bis, there would have been no need to include an explicit compulsory licensing provision in that Article. Further evidence that compulsory licensing of the public performance right is not permitted under Article 11(1) is found in the history of the mechanical license in Article 13.11 The 1948 Brussels text of Article 13(1) originally included a right to record musical works and to perform them by means of recordings. 12 Both of these rights were subject to compulsory licensing in Article 13(2). 13 At the Stockholm Conference in 1967, it was decided that Article 18(1) was superfluous, both because a general right of reproduction was created for the first time in the Stockholm text and because the right of public performance by means of recordings was already included in the public performance right in Article 11(1). Accordingly, Article 18(1) was eliminated and the compulsory license in Article 13(2) (now renumbered Article 13(1)) was expressly limited to permit a compulsory license only to record musical works but not to perform them. Indeed, one of the arguments advanced in favor of the Stockholm revision of Article 13 was that "[old Article 13(1)] should be deleted in the interest of authors, because the compulsory license cannot apply to the public performance by instruments of mechanical reproduction [i.e., by means of recordings]."16 Thus, it could scarcely be 14 9. See S. Bergstrom, Report of Main Committee I ¶ 209 (1967) [hereinafter cited as Stockholm Report]; WIPO Guide, supra note 4, at ¶ 11.6. 10. Stockholm Report, supra note 9, at ¶ 209. See also WIPO Guide, supra note 4, at ¶ 11.6. 11. The mechanical license is discussed in greater detail in Chapter 5 of this Report. 12. See Stockholm Report, supra note 9, at ¶ 227; WIPO Guide, supra note 4, at ¶ 13.2. 13. See Stockholm Report, supra note 9, at ¶ 227; WIPO Guide, supra note 4, at ¶ 13.6. 14. See Stockholm Report, supra note 9, at ¶ 229; WIPO Guide, supra note 4, at ¶ 13.2. 15. See Stockholm Report, supra note 9, at ¶ 232; WIPO Guide, supra note 4, at ¶ 13.6. 16. Records of the Stockholm Conference ¶ 1344.4 (1967) (remarks of Mr. Straschnov). It is interesting to note that these remarks were supported by William Wallace. See id. at 0 1345. clearer that the Stockholm Conference intended to disapprove any compulsory license for the public performance of recorded music. 17 William Wallace, after initially concluding in 1977 that our jukebox license was "probably the only case where such a [compulsory licensing] system is to be considered as incompatible with the provisions of the Berne Convention," subsequently suggested that the jukebox license might be found permissible under the general consensus of the Stockholm participants that member countries could "take all necessary measures to restrict possible abuse of monopolies."'19 Because it could be argued that section 116 was designed to ensure that there was "no abuse of the monopoly position enjoyed by" the performing right societies in determining the royalty rates of jukebox performances, and because the rate was subject to periodic adjustment in proceedings at which authors would be able to make their case, Wallace was "hesitant" to conclude that section 116 was in conflict with the Convention.20 This line of argument is not without difficulty. While it is true that the Stockholm Conference acknowledged every member country's sovereign authority to restrict possible "abuse of monopoly," it is not clear that this authority extends to the creation of a compulsory licensing system in cases where none is permitted by the Convention itself. The WIPO Guide indicates only that the "abuse of monopoly". principle sanctions the laws of countries within the Anglo-Saxon legal tradition which provide for tribunals to arbitrate between collecting societies and users of copyrighted works; it does not suggest that these countries may deprive individual copyright owners of the right to consent to the licensing of their works. 21 On the contrary, it was 17. The Stockholm text of Article 13(1) was confirmed without change at the 1971 Paris Conference, which established the most recent text of the Convention. See WIPO Guide, supra note 4, at ¶ 13.6. 18. Wallace (1977), supra note 8, at 13. 19. Wallace (1978), supra note 5, at ¶ 7(c), quoting from Stockholm Report at ¶ 263. See also WIPO Guide, supra note 4, at ¶ 17.4. 20. Wallace (1978), supra note 5, at ¶ 7(c). A similar argument was recently made by the Director General of the World Intellectual Property Organization in response to written questions submitted by Senator Mathias. See letter from Dr. Arpad Bogsch to Mr. Harvey J. Winter, Attachment at 3 (June 19, 1985). 21. See WIPO Guide, supra note 4, at ¶ 17.4. In commentary on its draft discussion bill to implement Berne, the Copyright Office has argued that its proposal-to retain the present compulsory license if and only if the parties fail to negotiate voluntary licenses within one year-comports with the practice in other Berne nations of using governmental tribunals to arbitrate disputes between copyright owners and users. See Appendix A, 6. We think this argument overlooks the objection (noted in the text above) that such arbitration, to be compatible with Berne, must not deprive individual copyright owners of the right to consent to the licensing of their works. Failing agreement after the first year of negotiation, the agreed at the Stockholm Conference that Article 17 (under which the "abuse of monopoly" principle was recognized) did not permit a government to introduce any kind of compulsory license. 22 At most, it was conceded that a country could override an author's consent to disseminate a work in order to maintain public order, e.g., "to allow the police to publish or broadcast a photograph of a wanted criminal." 23 Another problem with the "abuse of monopoly" argument is that it presupposes that the performing right societies enjoy a "monopoly" in determining the royalty rates for public performances of recorded music-a conclusion that the U.S. courts have consistently rejected. Thus, even assuming that this principle sanctions a system of compulsory licensing to prevent an "abuse of monopoly," there is no evidence to suggest that such a monopoly exists with respect to the licensing of jukebox performances or that a compulsory license is needed to prevent its abuse. In recent testimony before the United States Senate, Dr. Arpad Bogsch, WIPO's Director General, argued that the U.S. jukebox license, although "theoretically" providing a lower level of protection than that required by the Berne Convention,25 is "not of sufficient importance from an economic viewpoint" to require any change in U.S. law to permit Berne adherence.26 Whatever its political appeal, this economic argument does not appear to overcome the substantive legal incompatibility identified in this Report. In the first place, it Copyright Office's scheme-like the present law-would do just that. Indeed, the Copyright Office concedes that its proposal is “not as clearly ‘Berne-compatible' as the simpler outright repeal of the current [jukebox] license." See Appendix A 16. at 113(625) 22. See Stockholm Report, supra note 9, at ¶ 262; WIPO Guide, supra note 4, at ¶ 17.3. 23. WIPO Guide, supra note 4, at ¶ 17.3. 24. See Broadcast Music, Inc. v. Columbia Broadcasting, Inc., 441 U.S. 1, on remand sub nom. Columbia Broadcasting Systems, Inc. v. American Soc'y of Composers, Authors and Publishers, 607 F.2d 543 (2d Cir. 1979), on remand, 620 F.2d 930 (2d Cir. 1980), cert. denied, 450 U.S. 970, reh'g denied, 450 U.S. 1050 (1981); Buffalo Broadcasting Co. v. American Soc'y of Composers, Authors and Publishers, 744 F.2d 917 (2d Cir. 1984), cert. denied, 53 U.S.L.W. 3597 (1985); K-91, Inc. v. Gershwin Publishing Corp., 372 F.2d 1 (9th Cir. 1967), cert. denied, 389 U.S. 1045 (1968); Broadcast Music, Inc. v. Moor-Law, Inc., 527 F. Supp. 758 (D. Del. 1981), aff'd mem., 691 F.2d 490 (3d Cir. 1982). 25. U.S. Adherence to the Berne Convention: Hearings Before the Senate Subcomm. on Patents, Copyrights and Trademarks of the Senate Judiciary Comm., 99th Cong., 1st Sess., unofficial transcript at 12 (May 16, 1985) [hereinafter cited as 1985 Hearings] (remarks of Dr. Arpad Bogsch). 26. Id. at 23. See also letter from Dr. Arpad Bogsch to Mr. Harvey J. Winter, Attachment at 2 (June 19, 1985) (where Dr. Bogsch argues in response to a written question from Senator Mathias that "the economic significance, for authors and composers, of the use of [jukebox] players is marginal”). |