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prepared by our office. Nor did the State Department in any manner respond to our position that monetary compensation must be a sine qua non of ratification. We appreciate that in their official capacity the State Department did not find it appropriate to express their views on compensation. Perhaps, in the subtleties of diplomatic correspondence, their failure to comment on our request for compensation may be construed as a silent expression of sympathy.
With respect to ratification, the State Department appears to feel that formal accession to the demands of the developing countries for free access to American works is the only alternative to those countries unilaterally obtaining such access.
Threats by foreign countries to expropriate American property are not unprecedented. However, I do not recall any instance in our history where the Senate has consented in advance to such expropriation because of fear that such threats would be acted upon.
Exhibit B is the letter of the Department of State to Chairman Fulbright. Exhibit C is our response to the Department's comments.
The accuracy of our analysis of the Paris revisions is supported in an article entitled “Downgrading the Protection of International Copyright,” by Irwin Karp, counsel to the Authors League. In this article, annexed as Exhibit D, Mr. Karp carefully examines the operation of the Paris concessions in the light of the real facts of publishing life. He concludes that the compulsory licensing system established by the revised Convention is a "dismal prospect" for authors in both the developed and developing countries and that “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." I would note that the authors group represented by Mr. Karp whose interests he sees as "disinally" affected generally does not include the authors of educational materials, whose futures are that much dimmer.
Exhibits A, C, and D fully explain our position with respect to ratification and compensation and contain supporting analysis and precedent. At this point, I will only summarize our conclusions.
THE REVISED UCC ESTABLISHES A VEHICLE FOR THE EXPROPRIATION OF THE PRIVATE
PROPERTY OF AMERICAN CITIZENS WITHOUT ADEQUATE COMPENSATION
The revised Universal Copyright Convention withdraws property, representing substantial investments of time, effort and money, from the control of its owner, substituting a national agency of a developing country and allowing it to deal with such property as it sees fit in the name of teaching, scholarship and research. What clearer example can there be of expropriation, defined in the dictionary as “to dispossess (a person) of ownership.”
There is nothing in this country's history or experience with foreign nationalization of American businesses which would give us any reason to expect that the developing countries will have a reasonable concept of "adequacy" of compensation in dealing with the literary property of American authors and publishers.
THE REVISED UCC EFFECTIVELY ELIMINATES IN EXCESS OF EIGHTY COUNTRIES FROM A
NORMAL AND NEEDED MARKET OF AMERICAN AUTHORS AND PUBLISHERS We have previously described the interests of American authors and publishers of educational, research and scientific materials in the developing countries as a market. The provisions of the revised convention will effectively bar these countries from reach ; indeed, certain provisions of the revision will give impetus to the establishment of foreign publishing enterprises, operating on a profit making basis and servicing a safe market of developing countries. There can be no legitimate reason for depriving American publishers of the opportunity to serve these markets, either through export or cooperation in the development of indigenous publishing.
American publishers are not insensitive to certain specific needs of the developing countries; it is an established practice of several American publishers to manufacture special editions of their works in foreign countries in order to make inexpensive copies available to foreign students. However, to make such special provisions a matter of national economic assistance policy rather than individual initiative requires that our government either assume the function of providing the assistance or assume the responsibility of assuring compensation to our authors and publishers for their enforced contributions.
Compared with other businesses of similar size, publishers own very little in the way of physical plant or manufacturing facilities. Their assets consist of the copyrights they control. Their ability to invest in the future—that is in the development of tomorrow's educational tools—depends upon the present and prospective income produced by their backlists of copyrighted works produced in past years to meet current educational needs.
Since 1962, Crowell Collier and Macmillan has invested over $1,750,000 in the development and continual updating and expansion of the Collier-Macmillan English program. This program, created primarily for use in teaching English as a foreign language in the developing countries, is the most extensive of its kind ever produced by an American company and paid for out of its own resources. It is used virtually throughout the world. Considering the attitudes expressed toward educational publishing and embodied in the operation of the revised Universal Copyright Convention, American publishers world, at the very least, have very serious doubts as to the advisability of such an investment today.
IF THE REVISED UCC IS RATIFIED BY THE SENATE, CONGRESS MUST PASS LEGISLATION
ASSURING DOMESTIC AUTHORS AND PUBLISHERS OF COMPENSATION FOR THEIR ECONOMIC INJURIES
In 1962, Congress passed a Trade Expansion Act designed to make possible the Kennedy Round of tariff reductions. The Act incorporates a number of adjustment assistance provisions designed to assist those workers and industries injured by lowered tariffs. In sending the preliminary form of this Act to the House, President Kennedy stated :
"When considerations of national policy make it desirable to avoid higher tariffs, those injured by that competition should not be required to bear the full brunt of the impact. Rather, the burden of economic adjustment should be borne in part by the Federal Government."
“Just as the Federal Government has assisted in personal readjustments made necessary by military service, just as the Federal Government met its obligation to assist industry in adjusting to war production and again to return to peacetime production, so there is an obligation to render assistance to those who suffer as a result of national trade policy.” [H. Doc. #314, 87th Cong. 2d. Sess. ]
In the debates on the bill, a number of Senators and Representatives reiterated this principle of governmental responsibility. Thus, Senator Mansfield stated :
“These import-affected workers would not be casualties of supply and demand or any other impersonal economic force. Instead, their unemployment would be directly attributable to a decision of the Federal Government taken in the national interest. Certainly, the Federal Government would owe a special obligation to those injured by such actions."
This philosophy of governmental responsibility to compensate private citizens injured in the interests of national policy was expressed by many other members of the House and Senate in the 1962 debates. In that instance there was no agreement by the United States, through tariff reductions, to permit foreign countries to set their own “adequate" price on American products. The mere threat of decreased protection to American industry and labor under the Trade Expansion Act provoked the strong and justified response of the Administration and Congress that the Government must compensate for private injury caused by concessions to public policy.
Obviously, therefore, where American goods and services—the intellectual products of American authors and publishers—are concerned, we look forward with confidence to the reinforcement of the philosophy of the Senate as clearly expressed in the Trade Expansion Act of 1962.
In concluding our testimony, we recommend that this Committee reject ratification of the Paris revision of the Universal Copyright Convention. At the very least, we urge that this Committee delay any action on ratification of the revised Universal Copyright Convention until it has made careful study of the effect of the Paris concessions on American authors and publishers, and after the attitudes of other developed countries have been expressed by formal action of their governments.
Recognizing that the issue of domestic compensation is not within the jurisdiction of this Committee, we urge that in reporting its decision to the Senate 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.
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 revisions of both treaties were conducted concurrently and the substantive provisions
1 A more detalled 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 languages 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 "Dereloping 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 ('ountries'" is contained in a document which states the opinion to he "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 developing 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 continue 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