R JASON S. BERMAN Chief Executive Officer STATEMENT OF JASON S. BERMAN on GATT IMPLEMENTATION before a JOINT HEARING OF THE SENATE SUBCOMMITTEE OF THE JUDICIARY COMMITTEE ON PATENTS, COPYRIGHTS AND TRADEMARKS and HOUSE SUBCOMITTEE OF THE JUDICIARY COMMITTEE AUGUST 12, 1994 SUMMARY OF THE TESTIMONY OF JASON S. BERMAN CHAIRMAN AND CHIEF EXECUTIVE OFFICER RECORDING INDUSTRY ASSOCIATION OF AMERICA While the GATT/TRIPS Agreement failed to secure some major objectives of the United States and its copyright industries - in particular, national treatment and market access, there are a number of critical provisions embodied in the agreement that can significantly further US economic goals by protecting American copyrighted exports. One of these is an agreement to provide protection for preexisting works that are still protected in their country of origin, thus guaranteeing that valid US copyrights will be respected around the world. The other is an agreement to provide mechanisms for the prevention of bootlegging of live performances. The United States now has the opportunity to demonstrate, by example, the breadth of these commitments. In regard to the so-called "retroactivity" issue, the United States must make it clear that the obligation to protect works still protected in the country of origin admits of no exceptions. This is not the current state of US law, and implementation of this measure will restore protection, or offer protection the first time, to a limited number of foreign works currently in the public domain. Congress has already done this in NAFTA implementation, and we proposed that GATT implementation be accomplished in the same, already approved, manner. As you can well imagine, there are vastly more US works currently unprotected in foreign markets than foreign ones here, and the economic consequences of taking this action are dramatically in favor of US industries. This is particularly true in the case of sound recordings, which are currently unprotected in as many as 70 countries. Failure to take this action could result in the inability to achieve protection for US sound recordings created up until the year 2000 the date on which TRIPS obligations become effective for economies in transition and for less-developed countries. In terms of the bootleg provisions, the TRIPS Agreement closes a gaping loophole in the existing international legal framework under which US performers and record companies have suffered grave prejudice. TRIPS represents the first international treaty to which the United States is a party that secures a performer's ability to prevent bootlegging. Passage of legislation creating criminal penalties for bootlegging will give us the effective means of curtailing an illicit trade currently generating about one billion dollars annually. I want to thank both Chairmen for inviting me to appear today to present my views on the critically important issues raised by GATT implementation. The manner in which the US implements its TRIPS obligations, and by so doing helps to define the meaning of the GATT/TRIPS Agreement, is of enormous commercial significance to US copyright industries generally, and to the record industry in particular. To properly describe this significance, permit me to provide some background information. Sound recordings occupy a very strange position in the both under US law and within the copyright system international legal system. US law did not extend federal copyright protection to sound recordings until 1972, and even then only a limited form of protection to enable record companies to fight piracy. International legal instruments for the protection of sound recordings did not arise until 1961 (Rome Convention) and 1971 (Geneva Phonograms Convention) and the standards contained in these Conventions are minimal. The United States is one of only a handful of countries that view sound recordings as "works" within the meaning of the Berne Convention, and international obligations in respect of sound recordings are thus generally established by virtue of the Rome and Geneva Phonograms Conventions, and now by GATT/TRIPS -- a major advance in terms of the level and extent Both Rome and Geneva Phonograms have limited of protection. -2 adherence (45 & 51 respectively, compared to 105 for the Berne Convention). The protection of US sound recordings in foreign markets is thus highly inadequate - indeed currently nonexistent in a great many countries. This legal environment will be entirely transformed by implementation of TRIPS by all GATT parties. By virtue of GATT/TRIPS, US record companies and performers will enjoy protection in essentially every country of the world (Note: The copyright owners of musical compositions have a different legal status, having been long recognized as "authors" of "works" under the Berne Convention, and therefore currently enjoy a high level of de jure protection. The inability of record companies to fight piracy, however, also directly and proportionately negatively affects authors and composers). Bearing in mind that for most countries TRIPS will be the sole basis for determining international legal obligations, it is critical that we properly and broadly define TRIPS obligations. One of the most critical of these obligations is expressed in Article 14.6, applying the rule of retroactivity in Article 18 of the Berne Convention to the rights of record producers and performers. This reverses the existing norm established in both Rome and Geneva Phonograms, that there was no obligation to protect preexisting sound recordings. represented a major achievement for US negotiators in Geneva who had sought to end decades long prejudice to the interests of the US recording industry. This -3 Of course, the measure of practical success that is achievable now completely hinges on the meaning of Article 18. < In US economic objectives If the possibility of determining "the conditions of application" (Article 18.3) of the primary obligation contained in Article 18.1 permits a great deal of latitude, including a decision to not apply the principle of retroactivity at all, then the US victory embodied in Article 14 (6) doesn't even rise to the level of that of Pyrrhus. fact, it will be more like Sisyphus. are best served by securing the narrowest possible reading of Article 18.3, and conversely the broadest possible interpretation of the essential principle of retroactivity contained in Article 18.1. It is my hope that we will be successful in establishing the proposition that there is little or no subjectivity in interpreting the meaning of Article 18. Let me return to the practical consequences of this proposition. By virtue of GATT/TRIPS, US sound recordings will be protected for the first time in as many as seventy countries. Many of these countries are "economies in transition" or "less-developed countries" that are excused, under the GATT transition rules, from meeting their substantive obligations until the year 2000. Unless we are successful now in introducing a narrow interpretation of Article 18.3, we run the risk of leaving unprotected all sound recordings produced prior to that date. This is not an issue |